§ The Earl of Lindsey and Abingdonasked Her Majesty's Government:
Why, in proposing to alter the treatment of advance corporation tax (ACT) for pension funds, it is intended to abandon the convention that tax is levied either on contributions or on pensions in receipt, but never on both, so far as personal pension holders and the self employed are concerned.
§ Lord McIntosh of HaringeyThere is no tax charge on exempt pension funds when they receive dividends. But they will no longer receive a subsidy from the Exchequer on their dividend income. The reform of corporation tax has removed a distortion which gave a tax incentive for pension schemes to prefer dividends to long-term growth.