HMRC Cracks Down on Pension Fraud
13 February 2013
HMRC has set up a team to investigate fraud in pension “unlocking” schemes giving people early access to their pensions.“Companies offering them are potentially landing clients with serious problems down the line because pension ‘liberation’ payments are not intended by tax law and so could have serious tax consequences for both individuals and companies involved,” HMRC said. "In addition, the fees charged mean those using these schemes risk financial loss on top of repaying the tax relief.”
Funds transferred to a recipient other than a registered pension scheme or a qualifying recognised overseas pension scheme may constitute an unauthorised payment.
Anyone who gains access to their pension fund before their minimum pension age, outside of the normal methods permitted under the rules, runs the risk of becoming liable to unauthorised payments charges, HMRC said.
The unauthorised payment charges can be up to 70% of the value of the payments or investments made. The unauthorised payment charge on the individual is 40%.
Please contact Sam Park at our Lurgan office (028) 3832 4924 or by mailto:email@example.com if you require further advice on your pension scheme options.