A-Day - PMI benefits in retirement
6 April, the so-called 'A-Day', has brought in a number of changes to the rules governing pensions arrangements. Most of these are not related to private medical insurance, but there is one area where there does appear to be a change.
Up until 6 April, those retired people fortunate enough to have retained medical insurance at their ex-employer's expense have not been taxed on the benefit. It now appears that this concession will no longer apply.
As with so many tax issues, the matter is not clear-cut. What we do know is that medical insurance benefits are not included in a list of items mentioned in the new rules that are specifically exempt from tax for retired persons. Our conclusion, therefore, is that PMI benefits are now taxable.
Most employers no longer allow retirees to stay in their company-funded medical plans, but for those that do, we suggest that they should in future be sure to inform their retirees of the value of the benefit that they are continuing to receive and advise them to study their next Self Assessment tax return closely, or consult their IFA or tax adviser.
THE INFORMATION CONTAINED IN THIS DOCUMENT IS OF A GENERAL NATURE ONLY AND SHOULD NOT BE RELIED UPON AS ADVICE IN ANY SPECIFIC SITUATION
For further information, please telephone your usual contact at Buck Consultants (Healthcare):
Tel: +44 (0)118 955 7700
Fax: +44 (0)118 955 7701
Email: healthcare@buckconsultants.com
Web: www.buckconsultants.co.uk
Abbot's House, Abbey Street, Reading, Berkshire, RG1 3BD, UK
Buck Consultants (Healthcare) Limited is authorised and regulated by the Financial Services Authority
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