Firefighter pension schemes tax implications

Conference is concerned at the HMRC tax implication facing a member who suffers a
delay in obtaining their full ‘ill health’ pension entitlement to commute 25% of their
pension, due to delays in the IQMP appeal process.

HMRC technical page RPSM09104130 states that the lump sum payment must meet
the following condition: ‘The lump sum is paid within an 18 month period starting
6 months before and 12 months after the member becomes entitled to the lump
sum’. Therefore, payments outside of these time limits are liable to tax.

This issue was highlighted following a 52 year old Member with 28 years pensionable
service, facing a 55% tax demand on a part of their pension commutation, having
successfully appealed against the initial IQMP decision to reject an ‘ill health
retirement.

Conference calls upon the Executive Council to instigate an investigation to ascertain
the extent of the problem, and if deemed necessary, raise the matter with all relevant
bodies to seek to address the issue.