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BeeHive  >  Press Articles  >  The Bee side - Simplification is not to be misconstrued

The Bee side - Simplification is not to be misconstrued

Having nothing much better to do with my time, I've been reading through Pensions Tax Simplification newsletter number 31, recently published by HM Revenue & Customs (HMRC). This regular newsletter is aimed at explaining the detailed complexities of our new simplified tax regime for pensions.

Unfortunately for the HMRC they have had to issue an apology and a correction in this newsletter for an unfortunate error that cropped up in an earlier newsletter - number 29. The misprint occurred in an article about how the alternatively secured pension (ASP) rules apply to people who are untraceable at their 75th birthday, something that I fear will become increasingly common as older people go to ground at the arbitrary age that the government has decided they are no longer fit to manage their own financial affairs.

The error centred around the missing word 'not' in a convoluted sentence that already included the word 'not' a bit later on. The effect of having one 'not' in and the other 'not' not in was, of course, to change the sense of the sentence. This is all cleared up once you realise that a member's uncrystallised funds in an arrangement will still be tested against the lifetime allowance at age 75 by the operation of paragraph 8(2) of schedule 28, Finance Act 2004, but rather than then becoming automatically held in an ASP at that point, the funds of an untraceable member will, instead, remain in suspense.

Mind you, I notice that in the same newsletter that apologises for this error, another error seems to have crept in. The article on inheriting tax- relieved pension savings states that inheritance tax (IHT) charges don't apply where a pension scheme has fewer than 20 members, but the pre-Budget report (note 15) clearly states that IHT won't apply if schemes have more than 20 members.

Now it seems to me that this is either a new type of error, where the phrase 'fewer than' has been mixed up with the phrase 'more than', or it could even be a recurrence of the missing 'not' problem with the intention having been not 'fewer than', but rather 'not fewer than'.

Some words and phrases can be interchanged without changing the sense of what's being said, of course, but it's not something that's too common. For instance, I'm reminded of the fact that the person who is most likely to be the least likely to do something is also the person who is the least likely to be the most likely to do it. But I can't think of any way that 'fewer than' and 'more than' can be mixed up without flipping the meaning of a sentence. So, on balance, I reckon we're in for another apology and correction in a future newsletter from the tax people.

Mind you, I can't help thinking that it was a lot easier to understand our tax system before it was simplified so much, but maybe I'm just not getting it?

Steve Bee

First published in Pensions Management, December 2007