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Petition protests pensions tax

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by Elaine Frei
Petition protests pensions tax

A petition aimed at Downing Street is demanding that the Treasury rescind a proposal that would put what petitioners call “punitive” taxes on alternative secured pensions (ASP). The ASP is a retirement plan that was set up particularly for the Plymouth Brethren, a religious group which objects to mandatory purchase of an annuity at age 75 on moral grounds. The group believes that annuities amount to gambling on human life because they are based on estimates of how long policyholders are likely to live.

The proposal by the Treasury would cut the funds in the ASPs by 82 percent on the policyholder’s death. The government claims that the plan is necessary in order to prevent abuse of the plan that was only intended for a few people and was set up to prevent religious discrimination. Opponents, which include many in the pensions sector, say that the proposal which includes the inheritance tax plus an additional charge of up to 70 percent, is punitive and “vindictive”. Under the proposed rules, a pension of £100,000 could be reduced to as little as £18,000 if willed to a relative.

The petition has so far only gathered 42 signatures, but experts in the industry expect that more will be gathered before the deadline of 31 March.

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News posted: February 14, 2007

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