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Taxation: Pensions

Volume 472: debated on Monday 3 March 2008

To ask the Chancellor of the Exchequer what estimate he has made of (a) the number of people affected by his decision to levy tax on pension funds above £1.8 million rather than of £1.4 million and (b) the effect on revenue to the Exchequer of (i) his decision to levy tax on pension funds above £1.8 million instead of £1.4 million, (ii) his decision to levy tax on pension funds above £1.4 million at 55 per cent. rather than 60 per cent. and (iii) his decision to delay the introduction of the 55 per cent. tax on pension funds above £1.4 million until 2010; and if he will make a statement. (190849)

I refer the hon. Member the answer given to the hon. Member for Birmingham, Selly Oak (Lynne Jones) on 10 July 2006, Official Report, column 1643W.

The exit charge on funds crystallized in excess of the life time allowance (LTA) is designed to place a maximum on tax relieved pension saving. We do not expect the exit charge to raise significant revenue and there is negligible Exchequer cost of reducing the rate to 55 per cent..

The exit charge on funds in excess was introduced on 6 April 2006. No decision was taken to delay its introduction until 2010.