Pensions changes in revised Finance Bill

The government has now published a revised version of the Finance (No. 2) Bill 2017. The Bill is significantly shorter than it was, the government having decided to remove all contentious provisions at this late stage to ensure that the Bill can receive Royal Assent before Parliament is dissolved on 3rd May. The pensions changes to be aware of are:

• The reduction to the Money Purchase Annual Allowance from £10,000 to £4,000 will no longer take effect.
• The Pensions Advice Allowance will no longer be introduced. How this will work for any members who have already relied on the provisions and taken advantage of the new allowance, is not yet clear.

The government has indicated that it if is re-elected it will re-introduce these provisions. There is therefore the possibility that the Money Purchase Annual Allowance for the 2017/18 tax year will be £4,000 after all. The planned changes to the taxation of overseas pension benefits and transfers to overseas schemes remain in the Bill and will therefore take effect as expected.