’Scrapping’ the tax-free lump-sum would not be a simple as it sounds. Nothing in the wonderful world of pensions, ever is. In 2006 ‘Pensions Simplification’ was the New Big Thing. One of its ‘simplifications’ was to limit tax-free cash to 25% of the pension fund, as some types of scheme before then allowed more than a quarter, in some cases all of it to be taken tax-free. If you have one of those, your rights are preserved; great for you, but hugely complicated for us, as most providers have been taken over several times since then and many don’t have a clue. If tax-free cash goes altogether, it can and will only be for new plans. Which will add yet another layer of complication to an already madly confused and confusing system, which even the qualified struggle to comprehend.
Inheritance Tax is in need of reform
Yes, Inheritance Tax is in need of reform, but then so is most of our ridiculously complex tax system. We tend to assume that ‘Death Duties’ are a relatively new, socialist tax intended to stop the landed gentry passing on their stately homes and estates and perpetuating their advantages.
