Govt to review DB superfund taxation framework

The government has said it will be reviewing the appropriate taxation framework for defined benefit (DB) pension superfunds, and making “technical updates” to McCloud tax rules.

In its Tax policies and consultations - Spring 2021 publication, the government stated that work on the DB superfund tax framework will proceed alongside the development of the regulatory regime, which is already underway.

The paper said DB superfunds were “innovative area”, and that it should not be assumed that the current tax regime that applies to entities and transactions in the superfund structure would remain unchanged.

“The government’s approach will be informed by the features of the permanent regulatory regime,” it noted.

Alongside this, the government announced that will be making “technical updates” to pension tax rules relating to the McCloud judgment, to rectify “anomalies” it has identified.

The government stated that it was finalising the McCloud remedy, during which it identified “several aspects of the pension tax framework that do not work as intended in all situations and need updating to deal properly with cases of this type”.

As an example, the government noted that the current framework does not “straightforwardly” allow savers to ask their pension scheme to settle annual allowance charges from previous tax years by reducing their future benefits, also known as Scheme Pays.

The paper stated: “The government will therefore make technical updates to pension tax rules to remove such anomalies.”

    Share Story:

Recent Stories



How the bulk annuity market is changing
Laura Blows speaks to Peter Jennings and Prash Mehta from Just about trends in the bulk annuity market and how this could impact trustees hoping to secure insurer engagement in 2022 and beyond
DC master trusts
Pensions Age editor Laura Blows, editor of Pensions Age look at developments within the DC master trust market with Paul Leandro, partner at Barnett Waddingham, and Mark Futcher, partner and head of DC at Barnett Waddingham.

Advertisement Advertisement