| February 2002
We first began discussion of private annuities with the Revenue in 1998. The Revenue does not usually discuss private wealth strategies with professional firms. We were therefore pleased that the open book policy which we have always adopted with the Revenue resulted in their consent to the initiation of discussions. Following wide ranging consultation with the then Deputy Director of the PSO and the head of technical compliance, and further consultation with the rebranded APSS, we have obtained from the Revenue the following policy clarifications:
· The purchase of private annuities does not breach relevant pensions tax legislation
· The purchase of private annuities does not breach relevant pensions tax regulations
· The purchase of private annuities does not breach any provisions of Revenue practice notes
The Revenue has made it clear that the use of private annuity purchase for the purpose of tax avoidance may result in loss of scheme approval. We entirely agree with that policy statement and we take all steps necessary to ensure that no such tax avoidance is permitted under the rules of the private annuity arrangements established by us. We are pleased that in the 5 years since the first private annuity was purchased, no purchasing pension scheme has been threatened with loss of approved status.
Pensions specialist Sharmi Musgrave says: “Having worked on this project for 5 years, it is excellent that clarity has now been achieved. However, some frustration remains at the continuing inability of Revenue representatives to be consistently “on message” about the position.”
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