Book Review – ‘Pension Choices – A Tax Guide 2013/2014’
‘Pension Choices – A Tax Guide 2013/2014’ by Robert Gaines (2013) Claritax Books Ltd ISBN: 978-1-908545-34-3. Softback £87.50. Available to purchase from www.claritaxbooks.com
The book will prove useful to a range of readers – financial advisers, lawyers, accountants and anyone dealing with the financial affairs of others. It is written in a clear style, explaining in a direct way much of the jargon associated with pensions. It is laid out in a way which aids understanding with useful headings, bullet points, tables etc. It will be particularly useful to the novice or student who is looking to find an authorative yet readable work which will aid their practical understanding of the subject.
The author has over 30 years practical experience of working with pensions across the broad spectrum of both the private and public sector and in advising individuals and has written many books on the subject.
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‘Pension Choices’ is arranged over 12 chapters starting with a background chapter on the tax benefits of registered pension schemes. Chapters 2,3 & 4 explore the way in which individual and employer contributions are made to schemes, limited by the lifetime allowance and improved by the tax treatment of member benefits. I found chapter 4 particularly useful explaining the different types of benefits and illustrating lump sum protections with examples.
For probate practitioners, estate planners and trust administrators and drafters the chapters on death benefit (Chapter 5) and death benefits and inheritance tax (chapter 10) will prove to be useful both to confirm understanding of what benefits are paid on death and how they are taxed but also in explaining these events and payments correctly to the bereaved. I regularly lecture on the use of pension by-pass trusts and the principles behind these tools are set out in this text.
Chapter 6 covers transfers and refunds and again with reference to the law and HMRC guidance together with examples the circumstances in which transfers are permitted and valued are explained.
There is a chapter on the ways in which pension scheme funds are invested (chapter 8) and the increasingly important international aspects when our law limits contributions to a lifetime allowance (chapter 9).
The radical changes to pensions on 6 April 2006 simplified pensions for most people but so as not to leave some people worse off schedule 36 Finance Act 2004 contains provisions dealing with transitional protection to ameliorate against reduced benefits or rights. Chapter 11 considers these protection measures.
The book concludes with a chapter on Employer-financed retirement benefit schemes or EFRBS for short. Chapter 12 explains what they are and why they are used and how they are taxed.
In short, this is a book which is a delightfully simple exposition of complex rules affecting the schemes and policies which most clients have but few understand. It provides the practitioner with easy access to the nuts and bolts of pensions: how they are used; how they operate and how they are taxed. I would recommend it as a teaching reference as well as for practitioners.
In view of the regular changes to the law and tax treatment of pensions and surrounding issues such as trusts perhaps an e-book which is updated on-line, rather like ‘Hutton on Estate Planning’ would be a useful addition in future.
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