The incompetent taxman
Dear Reader,
I hope you’re having a good end to the week. I’m writing with something I think you’ll find interesting. Or enraging, depending on how far along you are in your retirement.
It concerns the money purchase annual allowance (MPAA), the amount a person who’s already begun drawing on their pension can pay back into their retirement pot in a given year without being charged.
Now, in 2017, this allowance was cut by 60%, from £10,000 down to £4,000.
The government introduced the cut to ensure savers were not recycling cash through their pension, and at the time HMRC forecast an annual tax benefit of £70m from the measure.
Of course, this is all rubbish.
A Freedom of Information request from Canada Life forced the taxman to reveal that it doesn’t even hold information on the number of people who made a tax charge as a result of breaching the MPAA.
In other words, they don’t have a clue how effective the tax has even been raised, and will have no way of knowing whether it succeeds or fails.
But, of course, it does succeed in the only thing that really matters to HMRC: grabbing as much of your hard-earned money as possible, using any means necessary.
I wish I could say I was surprised.
I can’t do anything about MPAA, unfortunately, but what I can do is show you how to rapidly cut down how much of your estate is taxed by HMRC.
For many people, it’s the biggest tax payment they make… but using our strategies you could take your obligations down to ZERO per cent… and not pay the taxman a penny.
Best,
Nick O’Connor
Publisher, Southbank Investment Research
