New Allowance for Pension Advice

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A new allowance which will enable people to access pensions advice in a tax efficient way will commence in April 2017.

Under existing rules, if you require advice regarding pensions you will normally have to pay a fee to a Financial Adviser. A new allowance being introduced in April will mean that you will be able to use funds saved in a defined contribution type pension fund to pay for the advice instead. The ability to access the advice in this manner essentially means that the cost of the advice is tax free.

The amount which can be accessed is £500. It can be accessed up to 3 different times provided it is in different tax years.

Be aware that the allowance can only be used to pay for regulated advice and cannot be used by those in final salary schemes unless they also have a defined contribution pension plan at the same time.

If you would like further information or would like to discuss your situation please contact our tax team.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Budget 2014 and 2014/15 Tax Tables

If you are interested in the tax allowances for 2014/15, please refer to our Tax Tables: Green & Co 2014/15 Tax Tables

If would like to  read our summary of the 2014 Budget, then please follow this link: Green & Co Budget Summary 2014

The main issues include:

Savings: Reform of ISAs. The current distinction between stocks and shares ISAs and cash ISAs will be simplified with the creation of the New ISA (NISA). The annual contribution limit is also increasing to £15,000, making it possible for a couple to save up to £30,000.

Annual Investment Allowance (AIA): If you are investing in plant and machinery for your business, the amount you can claim capital allowances on has doubled from £250,000 to £500,000. This will run from April 2014 to 31 December 2015.

EISs & VCTs: No change in the rules for EIS and VCTs as you can still claim 30% income tax relief on these investments.

Inheritance Tax (IHT): The IHT threshold will remain at £325,000 until 5 April 2018.

For more tips, refer to the ‘think ahead’ boxes of our guide.

Please contact us if you need more information on these changes, or any other matter.