Legislation will be introduced in the Finance Bill 2011 that will remove the tax charge on borrowing linked to the cost of setting up, managing or administering the national employment savings trust (Nest), subject to conditions.
Those affected include employer, employees, Nest and its members, as well as other qualifying pension schemes when auto-enrolment is introduced in 2012.
The legislation will also remove the tax liability on any interest payments on late pension contributions made by an employer to qualifying pension schemes and provide a regulation-making power to deal with any unintended tax consequences that may emerge as a result of the implementation of Nest and the employer duty provisions as set out in the Pensions Act 2008.
The national employment savings trust (Nest) is not intended to replace existing pension schemes such group personal pensions (GPPs), stakeholder schemes and group self-invested personal pensions (Sipps). Speaking at the first day of the Employee Benefits Pensions Summit 2011, Paul Gilbody, director of market engagement at the Nest Corporation, said that the scheme is also not designed for everybody to use.
“Nest is not designed for everybody,” he explained. “Not every organisation will end up using Nest and quite right too. Nest is designed for a specific population – those who are not currently saving for retirement.”
“There is an awful lot of good provision out there at the moment and that will continue. Some employers will just carry on with what they are doing at the moment. The vast majority are going to have to make some decisions about what [provision] they are going to put in.”
As one of Bishop Stortford’s most respected IFA’s we can help you make sense of the changes that are coming into place.
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