Why Tax Free Cash will not be removed

Tax free cash from your clients pension pot will not be removed.
But, whilst a flat-rate 30% tax relief does make a lot of sense to your BRT clients, it’s BAD news for HRT.

Why?

I’m going to show you exactly how TFC works and why a flat-rate 30% tax relief will make a lot of sense to a lot of your basic-rate-paying clients, but bad news for higher-rate tax payers…

I thought it would be worth putting the record straight and explaining the facts, in the light of some rubbish which has been written recently:

1. KPMG:
”What will happen if a future Chancellor ends higher rate tax relief on contributions or scraps tax free cash to help fund pensions for the less well off?”

2. Techlink
”The pensions policy institute and ….Steve Webb have all suggested….changing relief to a flat rate of 30% … There has also been talk of removing tax free cash.”

To be fair to Techlink, they are just reporting what has been said, but KPMG should know better.

Here’s two video’s to explain exactly how it works:

1. How does tax free cash work and why it will not be removed

https://www.vimeo.com/

 

2. Why a 30% flat rate tax relief = no tax relief for higher rate taxpayers

https://www.vimeo.com/