The
Chancellor has announced a new flexibility for people who have already
purchased an annuity. From April 2016, the government will remove the
restrictions on buying and selling existing annuities to allow pensioners to
sell the income they receive from their annuity for a capital sum.
Individuals
will then have the freedom to take that capital as a lump sum, or place it into
drawdown to use the proceeds more gradually.
Income tax
at the individual’s marginal rate will be payable in the year of access to the
proceeds.
The proposal
will not give the annuity holder the right to sell their annuity back to their
original provider. The government has begun a consultation on the measures that
are needed to establish a market to buy and sell annuities and who should be
permitted to purchase the annuity income.
The
government recognises that for most people retaining their annuity will be the
right choice. However, individuals may want to sell an annuity, for instance to
pay off debts or to purchase a more flexible pension income product.
We will keep
you informed of developments.
Internet link: GOV.UK News
For more
information please do not hesitate to contact Cliff Pocock at Ward Williams
Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.
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