Defined terms and links to relevant guidance
Defined terms
“AA” annual allowance
“A-Day” 6 April 2006
“DB” defined benefit
“DC” defined contribution
“HMRC” HM Revenue & Customs]
“LTA” lifetime allowance
“PASA” the Pensions Administration Standards Association
HMRC guidance
There are potential tax issues in GMP equalisation and conversion – see below. HMRC has issued the following guidance:
- HMRC GMP equalisation tax newsletter – AA and LTA issues dated February 2020 (“HMRC tax guidance No.1”, see our Alert) – focusing solely on “plain vanilla” GMP equalisation, so not GMP conversion or more extensive changes around equalisation
- HMRC GMP equalisation newsletter – past and future lump sums dated July 2020 (“HMRC tax guidance No.2”) – again, focusing solely on GMP equalisation
PASA guidance
A GMP equalisation working group chaired by PASA is producing guidance on various aspects of GMP equalisation. So far it has published the following referable to GMP equalisation:
- Call to Action dated July 2019
- Methodology guidance dated September 2019 (see our Alert)
- Reconciliation and rectification guidance: When to rectify? dated March 2020
- Data guidance dated July 2020
- Communications guidance dated August 2020
- Tax issues guidance dated February 2021 – building on HMRC tax guidance No.1 and No.2 (see our Alert)
Further PASA guidance on past transfers, GMP conversion (including tax considerations) and anti-franking is expected.