This is two days before implementation of a major legislative change.
Newsletter 158 — April 2024 - GOV.UK
It suggests the following groups of people should hold fire until it gets regulations through Parliament updating the position.
HMRC says any case which involves:
scheme specific tax-free cash protection
a transfer of a case with enhanced protection
enhanced protection and primary protection cases with protected lump sum rights of more than £375,000
the payment of a lump sum death benefit from funds which crystallised prior to 6 April 2024
any transfer from drawdown to a QROPS
any transfer to a QROPS which involves pre-April 2006 benefits.
‘schemes should advise members to request a delay to the payment/defer their request to transfer’.
While this affects a minority of individuals, some may be reaching their intended retirement age or have made plans to take benefits. HMRC suggesting, at this very late stage, that action should be delayed is not in any way ideal. Especially given some people may have made plans or given commitments based on the tax-free cash and/or income they were due to receive.
We don’t yet have a timescale for resolution. But for HMRC to draft the regulations and get them through Parliament may take 2-3 months.
Andrew Tully, Technical Services Director at Nucleus Financial said: ‘To suggest at such a late stage that people should delay taking benefits or transferring shows how poorly these changes have been implemented. We are only a few days away from implementation so some advisers and customers will have made plans and committed to use funds. Now HMRC is effectively delaying payments to customers or stopping them taking certain actions whilst it fixes incorrect legislation. It’s a bit of a shambles.’
|
