Big increase for pensions advice threshold

Employer-arranged advice exempt up from £150 to £500.

Before 6 April 2017, pension advice to the value of £150 per employee per tax year was exempt from income tax if paid for by the employer.

From 6 April 2017 the exemption will apply to the first £500 worth of pensions advice provided to an employee in a tax year, whether the employer pays for or reimburses the employee for the cost of the advice.

The exemption will apply if the advice is made available to employees generally or to employees generally at a particular location. However, it will also be capable of applying when the pensions advice is tailored to the employee’s specific personal circumstances of nearing retirement either by age or ill health.

The legislation will achieve this by setting two alternative qualifying conditions:
the availability conditions
where the employee has either reached the ‘minimum qualifying age’ or ‘ill-health condition’.

The exemption of £150 for advice before 6 April 2017 will no longer be available.