The Treasury is to fight the ruling by the Information Commissioner, which states it must disclose the reasoning behind the decision to get rid of tax credits on dividends for pension funds.
The independent Information Commissioner recently ruled that the Treasury was wrong to refuse a Freedom of Information Act request for estimates given to ministers about the effect on pension funds. The matter will pass to the independent Information Tribunal, which will make the final ruling. No timescale has been given.
Our view
Dividends are a share in a company's profits. These profits have been taxed in the form of corporation tax. When owners of the shares receive dividends, they have therefore been taxed.
Pension funds and ISAs used to be able to reclaim some of the tax - the tax credit, to fit with their tax privileged status. This was withdrawn and is obviously now in question as it saves over £5 billion pounds a year i.e. your pension funds grow £5 bn a year less!