Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the number of people over state pension age who will receive a Simple Assessment for income tax in each tax year from 2027–28 to 2030–31; and how many of those people have not previously received a Simple Assessment.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
HMRC does not hold estimates of the number of people over State Pension Age who will be required to complete a Self Assessment tax return for future years. Producing these estimates would require forecasting individual yearly circumstances over several tax years and then forecasting customer channels ‘for the first time.’
The government has introduced the Pension Tax Allowance (PTA) to reduce the disproportionate administrative burden of paying small amounts of tax for those with income up to the value of the full new State Pension in this Parliament. Most pensioners already pay tax on their income, including their State Pension where applicable. Depending on individual circumstances, tax can be collected through PAYE, Self Assessment or Simple Assessment.
It is estimated that, in 2027 to 2028, the PTA will mean that over 200,000 pensioners will not receive a Simple Assessment bill that they would have otherwise received.
HMRC takes a proportionate approach to the reporting of small amounts of income and collection of tax on those amounts.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the average cost to HM Revenue and Customs of issuing and collecting a Simple Assessment from a person over state pension age whose total income in 2027–28 falls within the Pension Tax Allowance withdrawal range of £13,037 to £13,319; and how that cost compares with the average amount of income tax collected from such a person.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
HMRC does not hold estimates of the number of people over State Pension Age who will be required to complete a Self Assessment tax return for future years. Producing these estimates would require forecasting individual yearly circumstances over several tax years and then forecasting customer channels ‘for the first time.’
The government has introduced the Pension Tax Allowance (PTA) to reduce the disproportionate administrative burden of paying small amounts of tax for those with income up to the value of the full new State Pension in this Parliament. Most pensioners already pay tax on their income, including their State Pension where applicable. Depending on individual circumstances, tax can be collected through PAYE, Self Assessment or Simple Assessment.
It is estimated that, in 2027 to 2028, the PTA will mean that over 200,000 pensioners will not receive a Simple Assessment bill that they would have otherwise received.
HMRC takes a proportionate approach to the reporting of small amounts of income and collection of tax on those amounts.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the number of people over state pension age who will receive a Simple Assessment for an income tax liability of (1) less than £50, (2) £50 to £100, and (3) £100 to £200 in each tax year from 2027–28 to 2030–31.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
HMRC does not hold estimates of the number of people over State Pension Age who will be required to complete a Self Assessment tax return for future years. Producing these estimates would require forecasting individual yearly circumstances over several tax years and then forecasting customer channels ‘for the first time.’
The government has introduced the Pension Tax Allowance (PTA) to reduce the disproportionate administrative burden of paying small amounts of tax for those with income up to the value of the full new State Pension in this Parliament. Most pensioners already pay tax on their income, including their State Pension where applicable. Depending on individual circumstances, tax can be collected through PAYE, Self Assessment or Simple Assessment.
It is estimated that, in 2027 to 2028, the PTA will mean that over 200,000 pensioners will not receive a Simple Assessment bill that they would have otherwise received.
HMRC takes a proportionate approach to the reporting of small amounts of income and collection of tax on those amounts.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the number of people over state pension age who will be required to complete a Self Assessment tax return for the first time in each tax year from 2027–28 to 2030–31.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
HMRC does not hold estimates of the number of people over State Pension Age who will be required to complete a Self Assessment tax return for future years. Producing these estimates would require forecasting individual yearly circumstances over several tax years and then forecasting customer channels ‘for the first time.’
The government has introduced the Pension Tax Allowance (PTA) to reduce the disproportionate administrative burden of paying small amounts of tax for those with income up to the value of the full new State Pension in this Parliament. Most pensioners already pay tax on their income, including their State Pension where applicable. Depending on individual circumstances, tax can be collected through PAYE, Self Assessment or Simple Assessment.
It is estimated that, in 2027 to 2028, the PTA will mean that over 200,000 pensioners will not receive a Simple Assessment bill that they would have otherwise received.
HMRC takes a proportionate approach to the reporting of small amounts of income and collection of tax on those amounts.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they plan to extend the payment deadline for inheritance tax attributable to pension assets during the transition to the arrangements due to take effect in April 2027.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
Inheritance tax (IHT) is due six months from the end of the month in which the death occurred. Late payment interest will begin to accrue on any outstanding IHT after this point. These deadlines are longstanding requirements which ensure that the tax due is collected quickly and efficiently.
Personal representatives will need to identify the deceased’s pension schemes and, as with identifying other assets, they can do this by examining the deceased’s paperwork and asking friends, family and any solicitor or accountant they had.
Pensions dashboard will help reconnect individuals with lost pots and increase engagement to support retirement planning. However, personal representatives and third parties will not be able to access pensions dashboards to conduct searches on behalf of others in the initial iteration.
The government has laid regulations introducing statutory deadlines for information sharing between personal representatives and pension schemes, to ensure the process of calculating, reporting and paying IHT due on pensions does not take longer than necessary. HMRC will provide guidance and templates for personal representatives and pension schemes to support this process.
Personal representatives and prospective personal representatives can direct pension schemes to withhold 50% of non-exempt pension benefits for up to 15 months to ensure that there are sufficient funds available to pay any IHT due. Personal representatives, prospective personal representatives and beneficiaries can also direct the pension scheme to pay any IHT due on the pension directly to HMRC before releasing the rest of those benefits, subject to certain conditions. These changes were introduced in response to feedback from tax and legal representative groups on measures to aid personal representatives administering estates, and to facilitate timely payment.
Illiquid assets held in pension schemes already need to be liquidated to provide members with an income in retirement or their beneficiaries with death benefits. If liquidating the asset is not desirable, there are several ways to pay the IHT due on the pension component of an estate, including paying the IHT due from non-pension funds.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they intend to permit inheritance tax attributable to illiquid assets held within pension schemes to be paid by instalments; and what assessment they have made of the risk of forced asset sales to meet the payment deadline.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
Inheritance tax (IHT) is due six months from the end of the month in which the death occurred. Late payment interest will begin to accrue on any outstanding IHT after this point. These deadlines are longstanding requirements which ensure that the tax due is collected quickly and efficiently.
Personal representatives will need to identify the deceased’s pension schemes and, as with identifying other assets, they can do this by examining the deceased’s paperwork and asking friends, family and any solicitor or accountant they had.
Pensions dashboard will help reconnect individuals with lost pots and increase engagement to support retirement planning. However, personal representatives and third parties will not be able to access pensions dashboards to conduct searches on behalf of others in the initial iteration.
The government has laid regulations introducing statutory deadlines for information sharing between personal representatives and pension schemes, to ensure the process of calculating, reporting and paying IHT due on pensions does not take longer than necessary. HMRC will provide guidance and templates for personal representatives and pension schemes to support this process.
Personal representatives and prospective personal representatives can direct pension schemes to withhold 50% of non-exempt pension benefits for up to 15 months to ensure that there are sufficient funds available to pay any IHT due. Personal representatives, prospective personal representatives and beneficiaries can also direct the pension scheme to pay any IHT due on the pension directly to HMRC before releasing the rest of those benefits, subject to certain conditions. These changes were introduced in response to feedback from tax and legal representative groups on measures to aid personal representatives administering estates, and to facilitate timely payment.
Illiquid assets held in pension schemes already need to be liquidated to provide members with an income in retirement or their beneficiaries with death benefits. If liquidating the asset is not desirable, there are several ways to pay the IHT due on the pension component of an estate, including paying the IHT due from non-pension funds.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government whether they intend to provide relief from late-payment interest on inheritance tax attributable to pension assets where personal representatives have acted diligently but delays by pension scheme administrators, or in obtaining valuations, prevent payment before the deadline.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
Inheritance tax (IHT) is due six months from the end of the month in which the death occurred. Late payment interest will begin to accrue on any outstanding IHT after this point. These deadlines are longstanding requirements which ensure that the tax due is collected quickly and efficiently.
Personal representatives will need to identify the deceased’s pension schemes and, as with identifying other assets, they can do this by examining the deceased’s paperwork and asking friends, family and any solicitor or accountant they had.
Pensions dashboard will help reconnect individuals with lost pots and increase engagement to support retirement planning. However, personal representatives and third parties will not be able to access pensions dashboards to conduct searches on behalf of others in the initial iteration.
The government has laid regulations introducing statutory deadlines for information sharing between personal representatives and pension schemes, to ensure the process of calculating, reporting and paying IHT due on pensions does not take longer than necessary. HMRC will provide guidance and templates for personal representatives and pension schemes to support this process.
Personal representatives and prospective personal representatives can direct pension schemes to withhold 50% of non-exempt pension benefits for up to 15 months to ensure that there are sufficient funds available to pay any IHT due. Personal representatives, prospective personal representatives and beneficiaries can also direct the pension scheme to pay any IHT due on the pension directly to HMRC before releasing the rest of those benefits, subject to certain conditions. These changes were introduced in response to feedback from tax and legal representative groups on measures to aid personal representatives administering estates, and to facilitate timely payment.
Illiquid assets held in pension schemes already need to be liquidated to provide members with an income in retirement or their beneficiaries with death benefits. If liquidating the asset is not desirable, there are several ways to pay the IHT due on the pension component of an estate, including paying the IHT due from non-pension funds.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what arrangements will apply where personal representatives lack sufficient liquid assets outside a deceased person’s pension to pay inheritance tax, and payment through the Pensions Direct Payment Scheme has not been completed before the tax falls due.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
Inheritance tax (IHT) is due six months from the end of the month in which the death occurred. Late payment interest will begin to accrue on any outstanding IHT after this point. These deadlines are longstanding requirements which ensure that the tax due is collected quickly and efficiently.
Personal representatives will need to identify the deceased’s pension schemes and, as with identifying other assets, they can do this by examining the deceased’s paperwork and asking friends, family and any solicitor or accountant they had.
Pensions dashboard will help reconnect individuals with lost pots and increase engagement to support retirement planning. However, personal representatives and third parties will not be able to access pensions dashboards to conduct searches on behalf of others in the initial iteration.
The government has laid regulations introducing statutory deadlines for information sharing between personal representatives and pension schemes, to ensure the process of calculating, reporting and paying IHT due on pensions does not take longer than necessary. HMRC will provide guidance and templates for personal representatives and pension schemes to support this process.
Personal representatives and prospective personal representatives can direct pension schemes to withhold 50% of non-exempt pension benefits for up to 15 months to ensure that there are sufficient funds available to pay any IHT due. Personal representatives, prospective personal representatives and beneficiaries can also direct the pension scheme to pay any IHT due on the pension directly to HMRC before releasing the rest of those benefits, subject to certain conditions. These changes were introduced in response to feedback from tax and legal representative groups on measures to aid personal representatives administering estates, and to facilitate timely payment.
Illiquid assets held in pension schemes already need to be liquidated to provide members with an income in retirement or their beneficiaries with death benefits. If liquidating the asset is not desirable, there are several ways to pay the IHT due on the pension component of an estate, including paying the IHT due from non-pension funds.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the time required for personal representatives to trace all of the pensions of a deceased person; and whether they intend to enable personal representatives to use pensions dashboards for this purpose.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
Inheritance tax (IHT) is due six months from the end of the month in which the death occurred. Late payment interest will begin to accrue on any outstanding IHT after this point. These deadlines are longstanding requirements which ensure that the tax due is collected quickly and efficiently.
Personal representatives will need to identify the deceased’s pension schemes and, as with identifying other assets, they can do this by examining the deceased’s paperwork and asking friends, family and any solicitor or accountant they had.
Pensions dashboard will help reconnect individuals with lost pots and increase engagement to support retirement planning. However, personal representatives and third parties will not be able to access pensions dashboards to conduct searches on behalf of others in the initial iteration.
The government has laid regulations introducing statutory deadlines for information sharing between personal representatives and pension schemes, to ensure the process of calculating, reporting and paying IHT due on pensions does not take longer than necessary. HMRC will provide guidance and templates for personal representatives and pension schemes to support this process.
Personal representatives and prospective personal representatives can direct pension schemes to withhold 50% of non-exempt pension benefits for up to 15 months to ensure that there are sufficient funds available to pay any IHT due. Personal representatives, prospective personal representatives and beneficiaries can also direct the pension scheme to pay any IHT due on the pension directly to HMRC before releasing the rest of those benefits, subject to certain conditions. These changes were introduced in response to feedback from tax and legal representative groups on measures to aid personal representatives administering estates, and to facilitate timely payment.
Illiquid assets held in pension schemes already need to be liquidated to provide members with an income in retirement or their beneficiaries with death benefits. If liquidating the asset is not desirable, there are several ways to pay the IHT due on the pension component of an estate, including paying the IHT due from non-pension funds.
Asked by: Baroness Spielman (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of whether the deadlines for pension schemes to verify personal representatives’ identities, supply valuations, and process direct payments are compatible with the deadline for paying inheritance tax.
Answered by Lord Pitt-Watson - Parliamentary Secretary (HM Treasury)
Inheritance tax (IHT) is due six months from the end of the month in which the death occurred. Late payment interest will begin to accrue on any outstanding IHT after this point. These deadlines are longstanding requirements which ensure that the tax due is collected quickly and efficiently.
Personal representatives will need to identify the deceased’s pension schemes and, as with identifying other assets, they can do this by examining the deceased’s paperwork and asking friends, family and any solicitor or accountant they had.
Pensions dashboard will help reconnect individuals with lost pots and increase engagement to support retirement planning. However, personal representatives and third parties will not be able to access pensions dashboards to conduct searches on behalf of others in the initial iteration.
The government has laid regulations introducing statutory deadlines for information sharing between personal representatives and pension schemes, to ensure the process of calculating, reporting and paying IHT due on pensions does not take longer than necessary. HMRC will provide guidance and templates for personal representatives and pension schemes to support this process.
Personal representatives and prospective personal representatives can direct pension schemes to withhold 50% of non-exempt pension benefits for up to 15 months to ensure that there are sufficient funds available to pay any IHT due. Personal representatives, prospective personal representatives and beneficiaries can also direct the pension scheme to pay any IHT due on the pension directly to HMRC before releasing the rest of those benefits, subject to certain conditions. These changes were introduced in response to feedback from tax and legal representative groups on measures to aid personal representatives administering estates, and to facilitate timely payment.
Illiquid assets held in pension schemes already need to be liquidated to provide members with an income in retirement or their beneficiaries with death benefits. If liquidating the asset is not desirable, there are several ways to pay the IHT due on the pension component of an estate, including paying the IHT due from non-pension funds.