Stand-out Q – unused annual allowance…

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TUE, 02 DEC 2014

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question
An individual fully crystallised all their benefits four years ago and annuitised their fund in the form of a lifetime annuity. In the meantime he has continued to work in the family business. Does the individual have the facility to make use of unused annual allowance?

Answer
For this individual to be able to make use of unused annual allowance from previous years, they have to have been a member of a registered pension scheme in the tax years in question. In respect of this situation, the legislation appears to be silent. Neither the definition of “member” or “pension scheme” aid our understanding, as neither references lifetime annuity/annuitant. We referred this to the Pension Schemes helpline at HMRC, who confirmed verbally, that the individual would be regarded as a “pensioner member” of a registered pension scheme and therefore would be able to make use of unused annual allowance.

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