Two things have happened at the beginning of this month that will have a major impact on my life.

The first is I am now working from home and, secondly, my wife thought I would need a bit of company during the working day so we are now the proud owners of a 10 week chocolate brown Cockapoo pup named Bertie.

For those who have had puppies then I am sure you will agree that as inquisitive little things, everyday is a great adventure and they quickly learn from their mistakes. Examples such as chewing live electric cables, leaping down stairs and squeezing themselves into the smallest spaces can be painful lessons. However, they quickly gain the wisdom not to persist in such activities. How I wish HMRC could adopt the same practice and change legislation so as to avoid potential pain for others.

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There have been a few such anomalies, one would have thought unintentional, created by the Taxation of Pension Act 2014, probably as a consequence of the legislation being rushed through with little time for a full consultation. One of these was the potential for there to be a charge to IHT when a member designated funds for drawdown but did not draw all of the funds before death. In the Autumn Statement it was accepted that this was an unintended consequence with the legislation due to be changed in the Finance Bill 2016 and the change will backdated.

Another quirk which many hoped would be rectified is where pension benefits are paid to a dependant child. As things stand if a member were to die and had nominated a flexi access pension to his two sons, where one was aged 20 and the other 24, the way the legislation is currently drafted there would be two completely different outcomes. The older child could take his benefits whenever he wished.

The younger child however, being under 23 years of age, is designated as a dependant beneficiary, therefore ceases to be allowed to benefit on attaining 23 years of age. The entire fund could of course always be taken before he reaches 23, but if the member died after attaining 75 years of age there is likely to be adverse tax consequences for the recipient.

HMRC has confirmed that you cannot merely convert from a dependant’s flexi access to a nominee’s flexi access so that is not an option unfortunately.

Paragraph 27A of Schedule 28 FA 2004 creates the problem as it does clearly state that a nominee is an individual ‘who is not a dependant of the member’.

So unfortunately a child of the member who has not attained 23 at the date of the member’s death can only receive dependant’s flexi access drawdown. The option for the scheme administrator to nominate the beneficiary to continue to receive drawdown does not exist where the member has nominated an individual or charity.

This anomaly and reluctance to change the legislation is not only unfair but seems to contradict the intention of Government. It could well be that this anomaly may only impact on a few individuals but it is an added complexity for advisers to have to explain to a client and the legislation could be so easily changed.

Let’s hope HMRC take a lesson from Bertie and see sense.

‘Good boy Bertie.’