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Special Annual Allowance: HMRC Issues Guidance
by Ian Neale 21/09/2009
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Last Friday HMRC PSS announced completion of technical guidance on the operation of the Special Annual Allowance (FA 2009 Sch 35). This material will form a new Chapter 15 of the Registered Pension Schemes Manual (RPSM). It has appeared following consultation with pensions industry representative bodies and via the Shared Workspace during the summer. Aries has been involved.
The 113 new RPSM pages are scheduled for publication at the end of October 2009 (HMRC's internal publication process requires this amount of time after finalisation of the text). In the meantime, HMRC has collected the new pages into a PDF file to help overcome the publication delay. This file replaces the one that was published on Budget Day 2009.
Aries Comment
We have begun our usual task of close examination of the guidance and expect to include some of the results in the next update to the Aries Pensions System due out in a few weeks. One important clarification provided concerns cases where it is possible to identify both a normal ongoing regular pattern of contributions, leading to one or more Protected Pension Input Amounts, and in addition some infrequent money purchase contributions, affording the individual a Special Annual Allowance of up to £30,000 instead of £20,000. There had been uncertainty about whether this conjunction would be allowable, especially where all contributions had been paid to the same arrangement; RPSM page 151.02.100 confirms it is.
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