The government announced at Budget 2014 proposals to allow people aged 55 and above, from April 2015, access to their money purchase pension savings as they wish during retirement, subject to their marginal rate of Income Tax.
The required tax changes were made in the Taxation of Pensions Act and explained in the accompanying explanatory notes.
This draft guidance was published on 21 October 2014 to accompany the Taxation of Pensions Bill when it was first introduced into Parliament. Amendments were made to the Bill during its passage through Parliament in 2 main areas:
- Schedule 2 to the Act was introduced which amended the tax treatment of income withdrawal paid to beneficiaries
- changes to the reporting requirements where an individual flexibly accesses their pension savings
These changes are not covered by this draft guidance, but will be included along with the other changes detailed in the draft guidance when the HM Revenue and Customs manual covering pensions is updated.