Key points from the Chancellor's Autumn Statement 2014
Pensions
The abolition of death taxes on pension assets in drawdown was a welcome move in the Budget earlier in the year. The Autumn statement expanded on this, announcing that annuity benefits, for those which are joint life or have guarantee periods or Value Protection, will be treated in the same manner as assets in income drawdown. This means that from April 2015 benefits will be passed to beneficiaries without the 55% ‘death tax’ if the holder dies before age 75. If the annuitant dies after age 75 then the beneficiary will pay their marginal rate of income tax, or a flat rate of 45% if the funds are taken as a lump sum payment. As with drawdown assets, lump sum payments will be charged at the beneficiary’s marginal Income Tax rate from 2016/17.
Furthermore, income payable from a joint life annuity, upon the death of the plan holder, will be able to be paid to any beneficiary, not just the spouse or civil partner as dictated by the current rules.
Pensioner Bonds
An announcement was expected regarding their availability and potential interest rates for these sought after bonds, however this is to wait until December 12th.
For more information or to discuss anything in more detail, please contact Chris Chambers.
Scott Burkinshaw
Scott is Tax Partner at Shorts, specialising in providing strategic corporate and personal tax advice.
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