Rowanmoor's Mark Lisle: The pensions cliffhanger

On my daily commute, I tend to alternate between a good book and that all too rare a beast, the good television boxed set (there is, I have found after all, a limit to how many times I can watch The Sopranos).

Watching several series ("seasons" as our American friends would have them) back-to-back can be fascinating; some characters develop, some fall by the wayside, others are talked of as if just somewhere else with a notion they will return. Then finally, the classic end of term cliffhanger (the outcome determined no doubt in part by player contract negotiations).

I am presently immersed in The West Wing. For those of you unfamiliar with the programme, it deals with the trials and tribulations of a fictional US leader, but mainly his supporting cast of staffers. This was a successful series, running from 1999 to 2006, chronicling the two terms of office of one President Josiah Bartlet, a Nobel Prize-winning economist (played by Martin Sheen).

Intertwined with the human interest stories revolving around the central cast, many of the plot lines deal with the difficult choices that have to be made in government in spending the taxpayer's money appropriately. I don't doubt that all governments face the same challenges.

What emotions and thought processes went into creating the framework for pensions taxation in the current model, I cannot begin to imagine. The days of pension schemes being exempt from tax disappeared with the Finance Act 2004. To make it more complex, that Act has been amended in every subsequent Finance Act. The most amended section relates to what happens to any fund the member might leave on death. The Government appears to have been totally fixated by the idea that someone who dies whilst drawing a pension could leave remaining funds to their beneficiaries. We can leave our worldly assets to our heirs, but leaving them funds within a pension scheme seems to have become completely unacceptable.

Whether in alternatively secured pension or drawing a scheme pension, in the event of death, passing on any remaining pension fund to heirs, other than through spouses' or dependants' pensions, is a big problem.

When the pension in payment has already been treated as earned income, why is there the need to penalise future generations who could continue to benefit from (and perhaps contribute to) the residual fund, and continue to pay income tax in receipt to the revenue?

With a President dogged by Multiple Sclerosis, his Vice President and Chief of Staff both recovering alcoholics (and the Deputy Chief of Staff never recovering in my eyes from a diabolical interpretation of Colin Montgomerie in "The Tiger Woods Story"), despite raging against these stacked odds, I still do not think the scriptwriters could come up with, or spin the benefits of such an inequitable policy and make it believable. Perhaps this is why HMRC maintains a dignified silence? If truth isn't stranger than fiction, then it can certainly be less intelligible.

Mark Lisle is compliance manager at Rowanmoor Pensions