We are now into the era of “Pensions Reform”, which allows you to cash in your pension and take it all as a lump sum, subject to a tax charge. Let’s just pour some cold water on this idea.

 
Let us start with a couple of definitions. Tax avoidance means taking action to avoid paying tax. For example, if you are passing through the duty free shop at an airport or port and you buy something, then you are engaged in tax avoidance because you could have bought the same item in a normal shop where VAT and other taxes would have been payable. 

 
This is a theme which we are introducing and to which we may return in future articles. On an average day, Sterling is over-valued from the viewpoint of manufacturing industry in the North of England and in Scotland. It is valued just right from the viewpoint of the City of London, and since the City is a good earner of foreign exchange, HM Government goes along with that.