Reacting to HMRC's guidance on GMP equalisation
20 Feb 2020
Commenting on the HMRC’s GMP Equalisation Newsletter of 20 February 2020, Matt Davis Head of GMP Equalisation at Hymans Robertson said:
“The industry will be pleased that HMRC are looking to take a fairly pragmatic approach on GMP equalisation, recognising GMP equalisation relates to benefits built up before the current pensions tax regime was conceived. There will be still some complexity which will leave some taxpayers scratching their heads, such as being asked to give retrospective Lifetime Allowance adjustments.
“Many early adopters for GMP equalisation are focusing on a conversion method for equalising GMP, which HMRC are still looking at. We know that insurers also have a strong preference for this method* and may allow it to influence their willingness to undertake a buy-in or buy-out with a scheme. We hope that HMRC will take a pragmatic approach when they come to issue guidance here, that does not cause tax problems for pension scheme members based on events entirely outside of their control.”