New queries, issue 4228

Pensions and DOTAS

The disclosure of tax avoidance scheme (DOTAS) form AAG1 now includes a ‘tick box’ for ‘Regulation 17A Pensions’.

We have recently seen comments from the technical team of a leading UK insurance provider which suggest that if advice is given to a client that will reduce or eliminate liability to the special annual allowance for pension contributions then this should be disclosed to HMRC using the AAG1 form.

The report would only need to be made once for the technique used and not every time a client utilises the arrangement.

For example recommendations to make a gift aid payment of £20 000 gross as an income reducer to bring total earnings below the £150 000 threshold should be disclosed.

This action would therefore remove the individual from the special annual allowance regime allowing them to fund up to 100% of their pensionable earnings with...