Quantum Advisory, the leading pensions, benefits and actuarial firm, today stressed that accuracy and clarity in member communications will be key to avoiding member complaints in the future, following the government’s announcement of a new 25% tax charge on transfers into QROPs in the budget this week.
Phil Farrell, Partner at Quantum Advisory commented: “Whilst the introduction a 25% tax charge on QROPs transfers is a positive step in combatting tax avoidance and pension scams, it could open the door to complaints from members who, unaware of the changes, incur an unexpected tax charge. Trustees must lean on their scheme administrators to ensure that member communications clearly reflect the changes announced by the Chancellor in respect of QROPS transfers.”
Farrell added: “It is also important to make members aware of the potential for a tax charge arising in the future, even if the member satisfied the criteria for a non-taxable transfer previously. Certain changes to their circumstances during a full five tax-year period following the transfer will resurrect the 25% tax charge.”
Phil Farrell, Partner