§ Sir Brandon Rhys Williamsasked the Chancellor of the Exchequer what is his estimate of the saving after five years, 10 years, 20 and 40 years of phasing out the entitlement to receive lump sums free of tax in occupational pension schemes after the current financial year, taxing at standard rate thereafter the element accruing in respect of future service.
75W
§ Mr. Norman LamontThe yield would depend on assumptions made about the amounts of lump sums which will be paid over the next 40 years, changes in the basic rate of income tax and the formula used to calculate the proportions of lump sum which would have accrued in respect of service after April 1987. An indication of the eventual yield from such a measure is that a tax at 29 per cent. on lump sums on retirement would yield about £850 million in 1986–87.