Budget 2007: The End of Pension Term Assurance
Posted by: Jason King
March 22nd, 2007.
In his budget announcement yesterday, the Chancellor announced the end of Pension Term Assurance (PTA). The full statement can be read below but effectively any application received by an insurance company on or after 14th December 2006 will not qualify for tax relief.
The good news is that as we reacted quickly and appropriately to the initial announcement on 6th December our clients’ PTA applications currently in the pipeline will qualify for tax relief as long as the plan starts before midnight 5th April this year. Those PTA plans that are currently in force will also be unaffected.
The industry had widely expected to get the green light on PTA however rumours of another change of heart in the last few days from the treasury seem to have been true.
The budget statement on PTA:
…in line with the principle that pensions tax relief is provided to produce an income in retirement, and to provide certainty going forward, the Government confirms that it will no longer provide tax relief on individuals’ contributions that are used to fund personal term assurance policies. …this will apply where the insurer received the application for the policy on or after 14 December 2006.
This entry was posted on Thursday, March 22nd, 2007 at 9:04 am and is filed under Life Insurance.
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