Tax Free Cash Loophole Closed

Published / Last Updated on 18/09/2006

Since the changes to pensions in April this year the Government has been working to close a loophole that allowed people to take more tax free cash than they were entitled to.

Under some pension schemes, tax-free cash in excess of 25% was allowed. People were then transferring in other pensions to take advantage of the higher amount of tax-free cash.

The loophole closure was implemented immediately and not after the typical 21-day notice period.

Our view

The changes to pensions have been complex and there are many loopholes to be found and closed!

The Revenue’s decision to close the loophole immediately was obviously to prevent anyone else taking advantage of more tax-free cash than they were entitled.

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