HMRC have made the following comments on their website to counter so-called “pension liberation” activity. Here’s what they have to say on the subject:
“HM Revenue & Customs (HMRC) is committed to combating pension liberation activity. HMRC has been working closely with other government departments/agencies and the pension industry to take action to prevent pension liberation and preserve pension savings.
Increasing numbers of pension savers are being targeted by unscrupulous companies encouraging them to access their pension savings early. This is commonly known as 'pension liberation' and has significant tax consequences.
HMRC has made a number of changes to strengthen existing processes to deter pension liberation and safeguard pension savings. These changes will take effect from 21 October 2013.”
As you can imagine the tax consequences of attempts to move funds out of pension savings can be significant. If you are tempted by such an arrangement you may be advised to seek tax advice.
HMRC’s last word?
“HMRC is continuing to take firm action to detect and pursue those who deliberately bend or break the rules by offering schemes to liberate pension savings. These changes are part of a continuing strategy to combat pension liberation, as is the ongoing review of the pension tax legislation and HMRC will not hesitate to make further changes if necessary.”