Pension Schemes Newsletter 166

HMRC’s January 2025 newsletter covers the inheritance tax on pensions consultation tax codes for pensions pension scheme returns relief at source lifetime allowance protection and enhancements payment update on low earners anomaly public service pensions remedy and pension flexibility statistics. Key points and reminders include:

• IHT on pensions consultation: HMRC have been consulting on the government’s proposals to extend IHT to pensions from April 2027 seeking views on the processes and information reporting requirements required to implement the change. The consultation closed on 22 January 2025 and a formal response and draft legislation are expected later in 2025.
• Tax codes for pensions: from April 2025 HMRC are enhancing the use of tax code information for scheme members newly receiving a private pension ensuring they pay the correct amount of tax from the beginning. HMRC will automatically adjust the tax code for those...