Personal Finance Society news update from 28 January 2015 - 10
February 2015, covering Taxation, Investments, and Retirement
Taxation and Trusts
Taxation and trusts
General Anti-Abuse Rule
HMRC has updated its guidance notes on the General Anti-Abuse Rule
(GAAR). The updated guidance is effective for transactions entered
into on or after 30 January 2015. The changes simply clarify the
guidance - there is no change in the law or HMRC's interpretation
The GAAR sets out which tax arrangements are abusive under the
Strengthening sanctions for tax avoidance
HMRC has published a consultation paper, 'Strengthening Sanctions for Tax Avoidance',
setting out proposals to tackle the serial use of tax avoidance
Those who enter into tax avoidance schemes already face
penalties. However, this consultation proposes additional financial
costs, such as a surcharge and additional reporting requirements on
users of multiple schemes that fail. The consultation therefore
seeks views on which are the most appropriate methods of tackling
persistent avoiders, and how these ought to be developed.
The consultation also considers whether, and how, to introduce
additional penalties in cases where the General Anti-Abuse Rule
(GAAR) applies. The consultation period runs until 12 March
Scottish property tax changes
The recently announced proposed changes by Finance Secretary,
John Swinney, in the Scottish Parliament, mean that the Land and Buildings Transaction Tax (LBTT) (if
agreed) will be lower for those buying properties at average
Scottish prices than initially proposed in the Draft Budget
2015/2016. The proposed rates are to apply from 1 April 2015.
If these changes go ahead, house buyers in Scotland at the low
to middle end of the scale will benefit from the revised rates for
the new LBTT, but those buying more expensive properties will still
pay far more than under Stamp Duty Land Tax (SDLT).
The Scottish tax rates and bands remain subject to
Parliamentary scrutiny and approval. It is likely that the Scottish
government will seek Parliament's approval of rate setting orders
which will be laid in Parliament in early February.
In the meantime, if these rates and bands are agreed the
position for the UK and Scotland will be as follows:
UK (applicable from 4 December 2014)
Scotland (from 1 April 2015 if agreed)
Up to £125,000
Up to £135,000
£125,000 - £250,000
£135,000 - £250,000
£250,000 - £925,000
£925,000 - £1,500,000
£250,000 - £1,000,000
HMRC clampdown on footballers
Around 140 footballers, some of whom are recently retired
Premier League players, face financial difficulty due to HMRC
demands for disputed tax relief from various investment
According to The Guardian, around 100 players have
sought help from their union, 'The Professional Footballers'
Association.' The welfare organisation for former players, 'Xpro,'
is representing an additional 40 players in an effort to deal with
the taxman's demands.
Xpro chief executive, Geoff Scott, told the paper that all 40
players are seriously affected by HMRC demands for the repayment of
tax reliefs on various investment schemes, with around 20 facing
bankruptcy and potential homelessness.
Broadly, HMRC has challenged a number of schemes in an attempt
to crack down on tax avoidance and has also published a list of
suspected tax avoidance schemes. Those investors who had not
settled with HMRC were sent an accelerated payment notice which
ordered them to pay the disputed tax within 90 days before HMRC
challenges the particular scheme in Court. The press named and
shamed some of the celebrity footballers who entered into the
popular film schemes but, according to The Guardian, a number of
lower-paid footballers have also entered into such schemes and are
struggling to pay the disputed tax to HMRC.
Loan trusts and the new IHT rules on multiple
(AF1, AF2, RO3, JO2)
The new rules on multiple settlements are designed predominantly
to catch a popular will planning strategy where a substantial gift
is made on death across a series of lifetime 'pilot' trusts.
However, closer inspection of the provision reveals that there are
limited situations where loan trust arrangements created during
lifetime could be brought within the scope of the new rules on the
We have recently had cause to consider the likely purpose of the
second limb of the new section 62A IHTA 1984 which is contained in
section 62A(2). In some circumstances this could have some
relevance to loan trusts created without any initial gift. The
relevant part of the section reads as follows:
"62A Same-day additions
(1) For the purposes of this Chapter, there is a 'same-day
addition', in relation to a settlement ('settlement A'), if:
(a) there is a transfer of value by a person as a result of
which the value immediately afterwards of the property comprised in
settlement A is greater than the value immediately
(b) as a result of the same transfer of value, or as a result of
another transfer of value made by that person on the same day, the
value immediately afterwards of the property comprised in another
settlement ('settlement B') is greater than the value immediately
(c) that person is the settlor of settlements A and B,
and references to the value of the same-day addition are to the
difference between the two values mentioned in paragraph (b).
(2) The transfer or transfers of value mentioned in subsection
(1) include a transfer or transfers of value as a result of which
property first becomes comprised in settlement A or settlement B;
but not if settlements A and B are related settlements."
We came to the conclusion that subsection (2) of the
new section is unlikely to have any bearing on loan trusts in any
circumstances (it is only relevant where the addition results in
property 'first becoming comprised' in the settlement and, in the
case of a loan trust, property would be 'comprised in the
settlement' before any addition by reason of the growth on the
investment if nothing else. However, consideration of
subsection (2) has highlighted a possible application of
subsection (1) to loan trust arrangements where the loan
is waived on death.
A loan trust arrangement typically involves the settlor making
an interest-free loan to trustees, which is repayable on demand and
which the trustees then invest in an investment bond. The loan
remains part of the settlor's estate (for both inheritance tax and
succession purposes) to the extent that it is not repaid; while any
investment growth is held outside the estate for the benefit of the
In the event of the settlor's death, any outstanding loan should
theoretically be paid to the settlor's estate to be distributed in
accordance with the settlor's Will. This can be avoided by the
settlor making provision in their Will for loan repayments to
continue to another beneficiary - say a spouse. The beneficiary
then controls the amount and timing of future loan repayments. If
such provision is not made, the loan will need to be repaid and
this will necessitate an encashment (or partial encashment) of the
bond by the trustees. Not only is this likely to trigger a
chargeable event and an income tax charge at the trustees' or
settlor's rate; there may be early surrender penalties as well as
additional costs of reinvestment if the trustees are not ready to
distribute the balance of the investment (perhaps because the
intended beneficiaries of the trust are still minors).
A number of loan trust providers have suggested a solution to
this problem in the form of a provision inserted into the Will
which waives any outstanding loan balance in favour of the trust.
The waiver represents an addition to the trust which is made by the
settlor/testator on the date of their death. This will be a
transfer of value which, because it is made on death, will be a
In isolation, this is not an issue as the new section 62A will
only be relevant where the addition falls within the definition of
a 'same-day addition' (this broadly requires there to be two or
more trusts each of which are increased in value on the same day).
However, where the initial investment into the loan trust has been
spread across two or more trusts created on consecutive dates to
obtain the benefit of multiple nil rate bands, and the settlor then
includes a provision in their Will waiving both/all the outstanding
loans on death, section 62A(1) will be in point.
The issue could also arise where there is just one loan trust
(and one loan that is waived on death) if there is also another
lifetime trust (e.g. a bypass trust) that is also added to by the
Our opinion is that section 62A(2) is probably designed to catch
lifetime pilot trust arrangements set up on different days where
the trusts are set up with no initial property. This is an
alternative approach to the usual position (where the trusts are
created with a nominal sum) that is taken by a number of law firms
on the basis of Opinion from leading Counsel that the trusts are
still valid even if there is no initial property in them.
Loan trusts, and other life policy trust arrangements, will
typically be unaffected by the new rules. However, it is
interesting to see that there could be some indirect situations
where the provision has significance. Where advisers are
recommending two or more loan trusts to the same settlor, it will
be important to avoid waiving the loans at the same point (whether
on lifetime or on death under a provision in the Will). Alternative
options might include leaving the right to repayment of one or more
of the loans to a surviving spouse.
Even if just one loan trust is being created, if any outstanding
loan balance is to be waived on death, it will be important to
check the provisions of the Will to ensure that it contains no
provisions for gifts to other trusts created by the same settlor
during their lifetime.
Fair Tax Mark available for "Open" taxpaying
It is fair to say that over recent years the fight against tax
avoidance has been stronger than ever before - we've seen numerous
cases (largely successfully) challenged in Tax Tribunals and in
Court by HMRC, numerous changes to legislation (including targeted
anti-avoidance rules), the introduction of the General Anti-Abuse
Rule (GAAR), 'naming and shaming' in the press…the list goes on.
Specifically for companies we have also seen the introduction, from
this April, of the diverted profits tax.
However, on the other side of the coin we are now seeing that
businesses are being recognised for paying the right amount of tax
by being awarded the Fair Tax Mark - a kite mark. A "carrot" to
complement the "stick" so to speak.
So what exactly is the Fair Tax Mark?
In a nutshell, it is the label for good taxpaying companies and
organisations. Businesses that apply for, and are awarded, the Fair
Tax Mark Kite mark essentially demonstrate that they are
transparent about their tax affairs and seek to pay the right
amount of tax.
So, by securing the Fair Tax Mark kitemark the reputation and
perceived worthiness of the business is likely to be improved. In
addition, consumers who are concerned about tax avoidance are
likely to be reassured that the business is not engaged in such
The Fair Tax Mark provides the business
- a confidential initial report and recommendations
- guidance and templates to improve reporting
- the option to display the Fair Tax trademark
What needs to be done to obtain the Fair Tax
- The Fair Tax Society will obtain copies of your accounts from
Companies House and assess them against the Fair Tax Mark Criteria
- They then draw up a report showing how you or your accountant
can improve your reporting
- You confirm changes and purchase a license to use the Fair Tax
Licensing fees are banded according to a business's turnover.
Half the fee is paid in advance and covers the cost of an
assessment. The second half of the fee then purchases the licence
to use the Mark for a period of one year.
The value of the Fair Tax Mark Criteria works in two ways; it
protects the business from reputational and financial risk, at the
same time as projecting an image of being open and honest to
consumers and investors. On this basis, it requires commitment from
the business not to engage in aggressive tax avoidance and assesses
the quality of a business's publicly available information, i.e. a
full set of accounts, on key tax and transparency issues.
More details of the requirements can be found on the Fair Tax website.
Just as we have seen "tax-avoiding companies" suffer
commercially through customer boycott it will be interesting to see
whether the Fair Tax Mark has the opposite effect for companies
that apply for and obtain it. Commercial benefit would be the
payback for the cost of acquiring the Kite mark. SSE (Scottish and
Southern Energy) is the first PLC to have obtained the Fair Tax
Mark. It will be interesting, in the competitive sector in which it
trades, to see if it represents any kind of meaningful
(commercially rewarded) point of differentiation.
The starting rate band and 40% tax
(AF1, AF2, RO3)
The introduction of the new £5,000 0% starting rate band from
2015/16 has created yet another anomaly in the UK tax system: a
marginal rate of 40%, just above the personal allowance.
We already have a 60% marginal band where the
personal allowance is phased out between £100,000 and (in 2015/16)
£121,200 of total income and marginal rates of 50.76% or more where
child benefit tax applies between £50,000 and £60,000 total income.
Now consider the following:
- Joan is 65 and has a state pension and small private pension
which provide £10,600 a year. That is all covered by the personal
allowance in 2015/16, so there is no tax to pay.
- She also has substantial fixed interest holdings and deposits,
which produce £5,000 gross a year. Thanks to Mr Osborne's Budget
2014 largesse, this also escapes tax.
So far, so simple. Now let's give Joan an
uncrystallised personal pension worth £4,000 which she decides to
turn into cash under the small pots rule (or as a UFPLS). £1,000
(25%) will be tax-free, but the other £3,000 is taxed as pension
income. If the plan is with another provider than her existing
private pension, PAYE with a BR month 1 code will apply, so £600
will be deducted. That will not be enough to cover her 2015/16 tax
- Joan's total pension income has risen to £13,600, so there is a
liability of £600 (£3,000 @ 20%).
- Her interest income is unchanged, but because she now has
pension income £3,000 above the personal allowance, she only has
£2,000 of starting rate band left (earned income ranks before
interest in the pecking order of income). She therefore has to pay
20% tax on £3,000 of interest - another £600.
The net effect is that the £3,000 of pension
income has added £1,200 to Joan's tax bill - an effective marginal
rate of 40%.
As we have said before, in the words of the former US Treasury
Secretary, William Simon, we should have a tax system which looks
"like someone designed it on purpose." That will never happen while
Chancellors of every hue tweak the current system.
Foreign profits targeted with Obama's tax
(AF1, AF2, RO3)
In President Obama's 2016 Budget he proposed that
US-based companies should pay a one-off 14% tax on historical
unrepatriated profits, regardless of whether the cash remains
overseas or not, and a minimum 19% tax on their future foreign
It appears that under the current US corporation tax system,
income earned and retained by an overseas affiliate of a US company
is not taxed in the US, provided the US parent company elects for
this exemption to apply. Instead, the company is awarded tax
credits for its payments to the overseas government, and the US
corporation tax rate only applies when the income (or realised
capital gains) is repatriated to the US. There is strong evidence
that offshore untaxed (in the US at least) cash piles have been
used to fund a number of large US company acquisitions of foreign
These latest proposals provide a little further evidence that
there is a global approach to ensuring that companies pay the 'fair
rate' of tax .There appears to be a general accord in the developed
world that concerted moves should be made to ensure that profits
generated from trade in a country should, largely, bear tax in that
country and not be capable of being shifted to a low tax
In connection with this, the UK has "made a start" with the
introduction, from 1 April 2015, of the UK diverted profits tax
legislation- aka "the Google Tax". This, broadly speaking, will
operate to apply a 25% UK corporation tax rate to profits earned
from UK trade by a multi-national that has shifted profits abroad.
It will be interesting to see how this is applied in practice once
it comes into force.
Insurance contract law reform - The Insurance
(AF2, CF3, RO5)
It is expected that the Insurance Bill will be passed by Parliament
before the current session ends on 30 March 2015. In that event,
the Act will come into force in 2016 (18 months after being
passed). The Bill includes provisions on disclosure, warranties and
the treatment of fraudulent claims. The Bill requires insurers to
act with 'good faith' and limits the use of warranties in
The original "duty of disclosure" (of all material information)
was perceived as too harsh on the insureds. The Consumer
Insurance (Disclosure and Representations) Act 2012 modified this
for "consumers" by removing the positive obligation to disclose on
consumers but left the obligation of disclosure for business
The duty of disclosure
The Insurance Bill now addresses business insurance. It replaces
the duty of disclosure with an obligation to make a "fair
presentation of the risk". So, in effect, it reduces the previous
duty, but instead frames it in different terms and it is more
onerous than for consumers. (Consumers have always needed
more protection than businesses).
The "fair presentation of the risk" is defined as "every
material circumstance which the insured knows or ought to know",
which is actually very similar to the previous test, but more
If this level of disclosure is not met, the disclosure must at
least provide sufficient information to put a prudent insurer on
notice to make further enquiries for the purposes of revealing
those material circumstances. The Bill provides examples of things
that might be material.
The remedies for breach
The most important change contained in the Bill relating to
disclosure is to the remedies for breach. If the breach is
deliberate/reckless the insurer retains the right to avoid where it
would not have entered the contract or only done so on different
terms if proper disclosure had been made. If the breach was not
deliberate or reckless the remedies are proportionate to the impact
of the breach on the underwriting decision.
Currently, a breach of warranty in an insurance policy
discharges the insurer from further liability from the point of
breach (even if remedied before any loss and even if
the breach was unrelated to the loss). This remedy, perceived
to be draconian by many, is abolished by the Bill.
The Bill proposes that an insurer has no liability in respect of
any loss occurring or attributable to something
happening after a warranty has been breached, but before the
breach has been remedied. This means that breach of a warranty
results in suspension rather than a discharge of the insurer's
liability so that if the breach is remedied before the loss,
then it has no impact on the insurance.
Another welcomed change is the abolition of "basis of the
contract" clauses (already precluded in consumer insurance) which
have the effect of converting every statement in a proposal form
into a warranty with the consequence that even non-material and
innocent misrepresentations give insurers the right to avoid the
The Bill provides that when an insured submits a fraudulent
- the insurer is not liable to pay that claim;
- the insurer may recover from the insured any sums paid in
respect of the claim; and
- there is the option to treat the contract as terminated with
effect from the time of the fraudulent act. This would give the
insurer the right to terminate the insurance such that losses
suffered after the fraud need not be paid whereas losses before the
fraud will be.
The Bill abolishes the current right to avoid a policy on the
grounds that the duty of utmost good faith has not been observed by
the other party. However, the duty itself remains.
For non-consumer insurance contracts, the Bill provides parties
with the ability to agree their own rules and "contract out"
of the default statutory provisions. The only exception to
this is in respect of basis of contract clauses. However, where the
insurer wishes to include a contractual term which puts the insured
in a worse position then the Act would provide, then this
must be drawn to the attention of the insured and the term
must be clear and unambiguous as to its effect.
It may help to remind who is /is not considered to be a
"consumer". For this purpose a consumer is "an individual who
enters into the contract wholly or mainly for purposes unrelated to
the individual's trade, business or profession". A consumer must
therefore be a natural person, rather than a legal person (such as
a company or corporation), and an insurance contract may be
"non-consumer" for two reasons: either the policyholder is not an
individual, or they have entered into the contract wholly or in
significant part for trade, business or professional reasons.
Life offices, of course, also deal with non-consumer clients,
ie. business clients, especially in the area of employee benefits
and business protection. Therefore, the above rules should be of
interest and relevance to all insurance companies.
Negative interest rates
(AF2, CF3, RO5)
We are increasingly entering a "through-the-looking-glass" world
when it comes to interest rates. But how long can it last?
What return would you get if you lent the German
government euros for five years?
The answer is less than nothing: the current
yield on the five year benchmark Bund is -0.08%. If you think
that's bad, then the two year Bund is offering -0.16%. Look outside
the Eurozone and Denmark pays -0.65% for two year money, while
Switzerland can borrow for ten years at -0.14%.
There was a time when central bankers fought shy
of negative interest rates. Lord King, the former Governor of the
Bank of England, dismissed the idea because of the financial
problems it could cause UK building societies. There were also
concerns that banks' IT systems would collapse if rates turned
negative. Thus UK base rates have remained at the 0.5% floor they
reached in March 2009.
Negative short-term interest rates now exist in
the Eurozone, where the ECB willchargebanks 0.2% on short-term
deposits. The Swiss central bank, following its dramatic dropping
of the CHF/Euro peg last month, is now 'paying' -0.75% on deposits.
Denmark, which has similar issues to Switzerland regarding its Euro
peg, cut the rate it pays on deposits at the central bank to -0.5%
at the end of January. Japan is on the cusp of negative yields,
with two year government bond rates oscillating between negative
and positive. Base rate has been 0% since October 2010.
The central banks have different reasons for the
negative rates. The ECB wants Eurozone banks to lend money rather
than leave it on deposit (the same stance as Japan), while both
Denmark and Switzerland are actively trying to dissuade currency
speculators and hold down the value of their currencies.
While short-term deposit rates remain negative,
it is inevitable that some shorter term government bond yields will
also be sub-zero. How far the negative yields stretch out reflects
a market view not only on the future of rates, but also on the
volume of purchases. In this regard the ECB's plan to start
quantitative easing in March has given impetus to negative yields:
the ECB has said it will buy bonds with negative yields.
How negative can yields become? One of the
arguments previously put forward for an interest rate zero lower
bound (ZLB) was that there was always the alternative of holding
old-fashioned paper cash, which by definition securely yields 0%.
The practical aspects of stockpiling paper money on a large scale
have so far ruled that out. The 21st century world is
not equipped to revert to a cash economy.
Negative interest rates are not new - Switzerland, Denmark and
Sweden have all briefly dabbled with them in the past. What is new
is the extent of negative rates. One estimate from JP Morgan was
that there is now €1.5tn of Eurozone government paper maturing in
the next twelve months with sub-zero yields. As monetary
experiments go, it is a further twist on QE. What will be
fascinating to watch is the impact of anyincreasein US rates, which
is still pencilled in for June 2015.
Reporting requirement for individuals in flexible
drawdown on 5 April 2015
(AF3, JO5, RO4, CF4, FA2)
Care should be taken in respect of any client who is in flexible
drawdown on 5 April 2015, as they have a reporting requirement
under the new pension flexibility rules.
Part 6 of the Taxation of Pensions Act 2014, sets out the
requirements for members to report the fact they have started to
access their benefits flexibly. They have 91 days to inform all
schemes of which they are "active members" or to which they are
making contributions. However, that is not an overly onerous
requirement as the scheme under which they have flexibly access
their benefits will inform the member of their reporting
However, there is a similar reporting requirement that applies
to individuals who, prior to 6 April 2015, were drawing benefits
under flexible drawdown. They have an obligation to report within
91 of a period beginning:
- 6 April 2015 if on that date the individual is an accruing
member of any registered pension scheme, or
- if not, the first day after 6 April 2015 when the individual is
an accruing member of a registered pension scheme.
The information that must be provided is that, as a result of
section 227G(3), they are to be treated for the purposes of
sections 227B to 227F as having first flexibly accessed pension
rights at the start of 6 April 2015.
Clearly, many individuals elected for flexible drawdown as they
had, for whatever reason, no intention of making further pension
contributions. However, we understand that some pension schemes
will be writing to individuals who are currently in flexible
drawdown to advise those clients they can now once again benefit
from an annual allowance. They may not, however, point out the
associated reporting requirement associated with recommencing
making DC contributions.
Advisers who have an ongoing commitment to advise clients who
have access flexible drawdown should consider advising them of the
resultant reporting requirement or possibly even suggesting they
report to all their existing pension schemes immediately following
the start of the new tax-year, even if there is currently no
intention of making further contributions.
Additionally, clients should be informed that, should they
commence a new pension arrangement on or after 6 April 2015, they
will need to inform any new scheme administrator they have to be
treated as having first flexibly accessed pension rights at the
start of 6 April 2015.
Whilst these rules are in place, and there are associated fines
(£300 plus £60 per day up to £3,000) for not reporting with in the
statutory time scales, it is not yet clear how diligent HMRC will
be in applying the penalties for non-compliance. However, we would
suggest that advisers should err on the side of caution and bring
this to their clients' attention.
HMRC issues Pension Liberation Newsletter
(AF3, JO5, RO4, CF4, FA2)
HMRC has issued the first, in what it is assumed to be a new
series of Pension newsletters specifically on the topic of pension
On 4 February 2015, HMRC issued Pension Liberation Newsletter 1. This is the
first, in what it is assumed to be a new series of Pension
newsletters specifically on the topic of pension liberation.
In this newsletter HMRC sets out:
- Its views on member responsibilities under the new pension
- A roundup of the steps that they have previously taken to help
combat pension liberation fraud.
We will consider these separately.
Pension Freedoms: HMRC's View
HMRC's view are that:
- Pension savers will have the freedom to spend or invest their
pension savings as they wish providing they meet the pension
- They want savers to make the right decisions about investments
and to understand the consequences of not seeking proper
- Whilst HMRC's action to reduce the likelihood of pension
liberation fraud, scammers will continually look for new ways to
target individuals. HMRC states the ultimate the responsibility for
getting the right advice lies with the pension scheme member.
This seems to imply that where individuals suffer tax penalties
from pension liberation fraud, HMRC will not offer a sympathetic
HMRC Steps to help Combat Pension Liberation
HMRC sets out both a roundup of steps taken over the last 18
months as well as a brief overview of those that come into effect
from 6 April 2015:
- October 2013, they changed the registration process for new
scheme registrations so it is now much less of a "rubber stamping"
- March 2014, they introduced several changes, including:
- a new requirement that the main purpose of registered pension
schemes should be to provide pension benefits
- strengthening their powers to enquire into new registrations
and existing registered pension schemes where HMRC suspect the
scheme is involved in liberation
- changes to make it easier for HMRC to de-register a scheme
where we have reason to believe it is involved in liberation
- new penalties where false information is supplied in connection
with the registration application
- September 2014; introduced the requirement for scheme
administrators to meet the "fit and proper" test.
Additionally, HMRC goes on to set out new steps that it will be
taking to further combat pension liberation fraud, including:
- Requiring scheme administrators to provide HMRC with additional
information and declarations online
- Amendments to the information that must be provided to HMRC
when a scheme changes its structure or range of number of members,
to enhance HMRC's compliance activities to combat pension
liberation. This is designed to help prevent a scheme being set up
legitimately and then changing its structure to become a scheme
that is more likely to be the target of pension liberation.
Draft legislation published to remove NEST's annual
contribution limit and transfer restrictions
(AF3, JO5, RO4, CF4, FA2)
The DWP has published a draft of the legislation necessary to
remove the annual contribution limit and the transfer restrictions
Draft legislation has recently been published by the DWP to
remove the annual contribution limit and the transfer restrictions
The National Employment Savings Trust (NEST) was set up
alongside the introduction of automatic enrolment to be a pension
provider which any employer would be able to use for any worker. To
prevent NEST from having an unfair advantage over commercial
pension providers that do not have government backing, various
constraints were placed upon it including an annual contribution
limit and transfer restrictions.
Following consultation from October to December 2014, draft
legislation has been published to remove the annual contribution
limit and the transfer restrictions on 1 April 2017. The Government
also retains the option to remove the individual transfer
restrictions earlier, from 1 October 2015, to coincide with the
introduction of automatic transfers.
The National Employment Savings Trust (Amendment)
Order 2015 was laid before Parliament on 16 December 2014. The
draft Transfer Values (Disapplication)(Revocation) Regulations do
not need Parliamentary approval and subject to approval of the
amendment order, these will be made in spring 2015.