Gavin Bullock, tax partner, comments:
"We welcome today's announcement that the Government
will be consulting on the tax rules for employer
"asset-backed" pension contributions.
This follows guidance provided by The Pensions Regulator at the end
of last year on how alternative funding arrangements are
assessed.
"It's well recognised that the UK faces challenges in the provision of good quality retirement benefits in the future. In challenging economic times, the use of structures, such as asset backed pension contributions, can be a win-win for both companies and trustees – helping to achieve a commercial balance between the funding requirements of trustees, the provision of greater security to scheme members and the need to continue to invest in the future of their business.
"Our expectation is that the consultation will allow pension funds and sponsoring companies greater transparency over the tax treatment of asset back financing, the consequence of which will be a reduction in the complexity and administrative burden surrounding the use of such arrangements."
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