§ Mr. NichollsTo ask the Chancellor of the Exchequer how many small self-administered pension schemes there are in existence; how many such schemes have ceased to be approved within the last five years; what he estimates to be the loss to the Revenue when the scheme assets of schemes which have ceased to be approved are transferred offshore; what he estimates the gain to the Revenue will be from his proposals in the Budget to address that abuse; if he will list all the consultees to his proposals to address this abuse; and if he will make a statement. [90731]
§ Ms HewittTax-approved pension schemes enjoy very generous tax treatment to encourage the provision of pensions throughout retirement. Arrangements which abuse these tax reliefs are wholly unacceptable and we will take whatever steps are necessary to ensure that approved schemes are used only for a genuine pensions purpose.
There are 46,400 tax-approved small self-administered pension schemes (SSAPS) in existence and 447 have ceased to be tax approved within the last five years. SSAPS can lose approval for a wide variety of reasons not necessarily connected to tax avoidance.
Measures to clamp down on abuses of the pensions tax reliefs through arrangements involving the transfer of scheme assets offshore have been in place since 1994 and were further strengthened in the 1998 Budget. The measures are intended to deter this activity rather than to raise tax.
As the 1998 changes were to counter emerging tax avoidance schemes there was no advance consultation. The Inland Revenue are currently discussing with the Association of Pensioner Trustees arrangements for enhancing the role of independent trustees of SSAPS as part of the 1998 package of measures.