Weekly update on new developments in the pension industry for week ending 31 July 2017: DWP publishes Countdown Bulletin 25 | Finance Bill resolutions confirm retrospective pension changes | Money taken from pension pots under freedoms reaches new high | Supreme Court ruling in Scottish pensions and divorce case
DWP publishes Countdown Bulletin 25
Countdown Bulletin 25 (July 2017) is now available on GOV.UK. Contents include:
- Changes to DWP legislation regarding late payments of CEP
- Paying State Scheme Premiums liabilities via Bacs
- Scheme reconciliation and active member queries
- Was in Scheme automated responses (type 3/4)
- Automation of SRS queries
- SRS to late expressions of interest
- Scheme reconciliation re-runs requests
- Scheme cessation update
Finance Bill resolutions confirm retrospective pension changes
Finance Bill resolutions have been published that confirm the following will be introduced with retrospective effect to April 2017 under the Finance Bill (No.2) Bill 2017:
- Pensions advice. Authorises the Finance Bill to make provision (including with retrospective effect) for an employment-related exemption from income tax in connection with pensions-related advice or information.
- Termination payments etc. Authorises the Finance Bill to make provision in a future year about the tax treatment of payments or benefits received in connection with the termination of an employment or a change in the duties in, or earnings from, an employment.
- Pensions: money purchase annual allowance. Authorises the Finance Bill to make provision (including with retrospective effect) about the money purchase annual allowance.
Money taken from pension pots under freedoms reaches new high
The amount of money people took out of their pension under pension freedoms reached a new high for the second quarter of 2017, according to the latest figures from HMRC.
376,000 people have accessed £3.45bn flexibly from their pension pots since January 2017, according to official statistics on flexible payments from pensions..
HMRC has also published it latest newsletter.
- Pension flexibility statistics
- Relief at source for Scottish Income Tax
- Annual return of individual information
- Qualifying recognised overseas pension schemes (QROPS) transfer statistics
- Lifetime allowance look up service for pension scheme administrators
- Reporting of non-taxable death benefits
- New Pensions Online service
Supreme Court ruling in Scottish pensions and divorce case
This case, Thomas McDonald v Annie Newton or McDonald, concerned the extent to which one spouse’s pension forms part of matrimonial property for division on divorce.
Mr. McDonald had contributed to a pension scheme for only a matter of months during his 25 year marriage.
At first instance and in the Scottish Appeal Court, it was held that it was only the value of the pension at the point when contributions stopped that should be considered as matrimonial property.
After pension contributions stopped, the value of the pension continued to rise for the remainder of the marriage.
The Supreme Court allowed an appeal against the decision of the lower courts, holding that “period of membership” of the pension scheme meant simply that and that the words “contributing” or “active” should not be read into that expression.
The increase in the amount of matrimonial property as a result of the Supreme Court ruling in this case is around £130,000. Moreover, the impact of the decision will not be confined to this case.
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