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Treasury in line for windfall from cashed-in annuities

26 April 2016
Issue: 4547 / Categories: News
Three consultations on the new scheme.

A consultation on the secondary market for pension annuities has been published by HMRC . It lays out the proposed detail of the tax framework for the secondary market which will allow pension investors who have previously bought an annuity to sell their guaranteed income in exchange for a lump sum.

The department estimates that up to five million individuals receive payments under pension annuities and that 300 000 of them will choose to sell them. This would give the Treasury a tax windfall of £960m in the first two years of the secondary market which is expected to be introduced in April 2017.

Tom McPhail head of retirement policy at Hargreaves Lansdown said: ‘Our research indicates a healthy appetite for this market though that will depend on what price investors are offered in exchange for their annuity income.

‘There are still unanswered...

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