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Snap general election halts decision to reduce MPAA

Following the recent announcement by the Government to call a snap general election in June, the Government has proposed a number of changes in order to expedite the passing of the Finance (No 2) Bill, before Parliament is dissolved on 3 May 2017.

One of the clauses being scrapped from the Bill is the proposal to reduce the Money Purchase Annual Allowance (MPAA), from £10,000 to £4,000 with effect from 6 April 2017. However, it is believed this clause may be passed at a later date if the current government is returned to office.

The MPAA was originally introduced in order to restrict the amount of contributions that individuals can pay and consequently receive tax relief on once they have already begun to withdraw funds from their pension pot, under the new pension flexibility rules.

As a result of the General Election the MPAA will remain at £10,000 for the time being.

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