Elaine Turtle: Out with the old, in with the new

Normally the end of the year is quiet in terms of changes to the pensions industry, but 2017 bucked this trend with a very sensible move by the Scottish government. Following the introduction of the Land and Buildings Transaction Tax or LBTT back in April 2015, which replaced the traditional stamp duty bands, there has been lobbying from the pensions sector for this to be reversed with regards to pensions. The tax charges can reach tens of thousands of pounds and many pension savers were trapped in their current scheme.The lobbying focused on the fact that LBTT is payable on in-specie transfers, which is not the case in England and Wales, and penalises those pension savers that want to move SIPP provider or between a SSAS and a SIPP, due to changes in circumstances. Due to the lobbying undertaken by solicitors, providers and advisers, Revenue Scotland announced in Dec 2017 that while such in-specie transfers are still considered to be land transactions, a charge will only occur if there is a consideration such as a change to the mortgage or interest rate. This decision is a sensible one and reflect the fact that there is no value realised when the property is made in-specie and mirrors the way these transfers are handled in the rest of the UK.Revenue Scotland has also taken the step of applying the change retrospectively, so that no pension saver will be disadvantaged if they have made an in-specie pension transfer and paid the LBTT charge. They will accept claims to repay the LBTT charge from any taxpayer who has filed and paid LBTT based on the contents of their bulletin issued in October 2016. Claims can be submitted by amending a previously submitted return, if there is time to do so, or by corresponding with them. While this is very welcome news, I feel for those pension savers that have been forced to stay with a provider due to the penal LBTT charge. They may have reluctantly stayed with a provider, being forced to pay higher fees, which cannot be reclaimed and also potentially had to suffer poor administration on their scheme. None of which helps build the reputation of the pension sector.We are aware of two potential clients that wanted to move from other providers to us, but due to the high tax charge to move in-specie, which was over £15,000 they decided to stay in a poorly run scheme that had very high charges. This move by Revenue Scotland will help them and means that others in the same position will have the choice to move, providing freedom and choice, which is a key goal to encouraging long term saving provision.Elaine Turtle, Director, DP Pensions

Elaine Turtle: Out with the old, in with the new

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