Originally Posted by
Easy Street
Melchy,
The obvious way to do it would seem to be to go back and re-build your pension year-by-year from 2015 to 2022, taking into account any promotions as they happened, and work out the tax due at the end of each year through that period. Add up the tax due over the 7 years, compare it to what you actually paid, and bill you for the difference.
I can’t see them making a huge one-off adjustment to your pension value in 2022 because that would certainly cost more in tax than a series of smaller back-dated adjustments. And that would penalise individuals for receiving in a lump what would have been given to them incrementally had the Government not acted illegally.
Easy Street,
That is the obvious thing to do, but it doesn’t work because the amount that is nominally allocated to your pension pot as it is, doesn’t change in line with the calculation of what you are actually due to receive. One year there was a 6 figure increase after a few years of low increases and in some cases year on year dips.
There’s no logic to the input amount and that’s the issue. In compensating people for being naughty, the potential exists for them to just throw a pot of money at peoples’ pots which puts them over the ALA - even though it’s nominal figures rather than any money actually received.
I appreciate it’s a first world problem at the best of times let alone now, but it hardly does much for a sense of injustice if you are taxed on the restitution of demonstrably illegal behaviour when it can easily be avoided by smoothing the inputs.