Early redemptions of pension savings (EPR) are limited to the amounts invested in these products until measures come into force to allow this money to be used without tax penalties.
This clarification is contained in a letter issued by HM Revenue and Customs, which has now been published on the Financial Portal and is based on an order from the Secretary of State for the Budget to allay doubts regarding the practical application of HM Revenue and Customs. exclusive reimbursement treatment for Pension Plans (PPR), Educational Savings Plans (PPE) and Pension Educational Savings Plans (PPR/E).
The source of these doubts is the fact that the regime has undergone several changes that came into force at different times, with AT emphasizing that repayment of these savings plans “covering situations provided for by law can only benefit from the exceptional tax regime of no penalties. if it corresponds to the amounts of subscriptions/supplies made before the entry into force of the relevant diplomas.”
Thus, in the case of a measure that in October 2022 allowed the redemption of savings plans (in PPR, PPE and PPR/E versions) without penalty up to the monthly limit of the Index of Social Assistance (IAS), in order to strengthen the liquidity of the population in conditions of high inflation, tax authorities the authorities emphasize that “only the repayment of supplies made before the date of entry into force of this law, that is, before October 20, 2022, can benefit from the exceptional treatment.”
In December of the same year, the measure was extended, which also allowed partial or full reimbursement of the cost of these savings plans to repay the installment loan for the purchase or construction of own and permanent housing, with the tax authorities clarifying that in this case “only the repurchase of supplies made until December 31, 2022, can take advantage of the exceptional regime,” since the law on the state budget for 2023 (which repeated this measure) only came into force on January 1.
On the other hand, in May 2023, a new change in the law allowed savings plans to be repaid up to the monthly Index of Social Assistance (IAS) limit for the purpose of early repayment of loan agreements, up to the annual limit of 12 IAS.
In this case, and since the diploma in question became effective 30 days after publication (which occurred on June 28), “only redemption of supplies made” before June 27, 2023 can benefit from exceptional treatment.
Under this exceptional repayment treatment, the obligation to stay for at least five years to mobilize is waived without the tax penalties that are typically associated with it (such as an IRS tax credit refund).
OE2024 extended this regime until 2024 and doubled the possible annual value (24 IFRS), meaning it does not affect the relevant delivery dates.
Author: Lusa
Source: CM Jornal
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