First, the good news. Whilst it is likely few members will wish to engage in the detail, schemes should pay attention to communications with their members. HMRC publishes guidance on GMP equalisation. The greatest obstacle to beginning a major project such as GMP equalisation is not knowing where to start. Lloyds Judgment on GMPs. HMRC's newsletter makes clear that: Increasing the amount of a benefit as part of a GMP equalisation exercise will not … The HMRC GMP Equalisation Working Group was formed to consider the issues arising in light of the Lloyds decision and HMRC published the first part of the GMP Equalisation Guidance on 20 February in its GMP Equalisation Newsletter ("the Guidance"). We’ve known since 1990 that pension schemes must equalise their ordinary pension benefits for men … Members will need What does HMRC's newsletter say? HMRC has issued its latest newsletter on guaranteed minimum pension (GMP) equalisation. HMRC has published a July newsletter with information on how it will tax lump sums payable following a GMP equalisation exercise. benefits go over the LTA, you must inform HMRC. In short, no. 17th July 2020 11:48 am 20th July 2020 10:27 am. news Pensions. impact of GMP equalisation benefit adjustments on both the annual allowance (“AA”) and the lifetime allowance (“LTA”). The HMRC working group published its latest guidance in February 2020. HMRC issued the second part of its Guaranteed Minimum Pension (GMP) equalisation guidance on 16 July 2020 ("the HMRC Guidance").This latest instalment deals with the impact of benefit adjustments on past and future lump sums paid by registered pension schemes. Opinion Pensions. Guidance on GMP Equalisation and the Lifetime Allowance 3 Continued overleaf. Lloyds Banking Group ordered to equalise pensions for men and women. HMRC has previously confirmed that paying a top-up to a transfer value to reflect GMP equalisation would not trigger a tax charge. That means going beyond remaining compliant, to proactively prepare for the future. GMP equalisation: HMRC pensions tax guidance One of the main barriers to schemes starting their GMP equalisation projects has been a lack of certainty as to how the pensions tax rules will apply. HMRC guidance. Whilst the newsletter gives some helpful guidance, it also leaves some important questions unanswered. 1.5. On 20 February 2020 HMRC issued initial guidance on these pensions tax issues. While the guidance provides helpful clarity in some areas, its scope is limited and it leaves a lot of significant questions unanswered. subject of a separate Guidance Note by the GMP Equalisation Working Group and, it is understood, HMRC guidance. Kate Payne: GMP equalisation is needed, but it will not be straightforward. Member communication and engagement GMP equalisation is a detailed subject. What schemes must do now is prepare to engage actively with the equalisation process. What doesn't the newsletter say? HMRC has today issued its long-awaited guidance on some of the tax issues associated with implementing GMP equalisation.. HMRC has published updated guidance on the tax implications for pension scheme members of lump sum payments made to them as a result of guaranteed minimum pension (GMP) equalisation.. 13th November 2018 4:57 pm 13th November 2018 5:44 pm. The newsletter does not give guidance on what happens if a member's benefit is increased as part of a GMP conversion exercise. On 20 February 2020, HMRC finally published its long awaited guidance on some of the tax issues associated with implementing GMP equalisation. Key points • HMRC makes clear that the Guidance “relates to benefit adjustments where the reason for the adjustment is solely for GMP equalisation” and that it “does not cover other benefit adjustments”. Member examples These examples give you an idea of the possible impact on three members who are potentially affected by the LTA. Its guidance applies only where there is an adjustment solely for GMP equalisation and crucially it does not cover GMP conversion. So, do we finally understand the tax consequences of equalisation? The guidance is limited in scope as it only relates to benefit adjustments where the reason for the adjustment is solely GMP equalisation.