In an IVA it is intended to use a pension with a fund value of say £80,000 be surrendered so the after tax lump sum is put into the IVA to exclude their share of equity of the main residence from the IVA. HMRC will deduct tax from the lump sum on an emergency basis. As no tax is payable in the Tax Year of the IVA taking effect, how can you minimise the pension tax deduction to maximise the net lump sum for the IVA. Given the IVA, will HMRC will repay any of the tax deducted from the lump sum on an emergency code as they would normally so it could be a further contribution to the IVA?
That is beyond me and is down to the way HMRC works, rather than the IVA. But, if it is in lieu of equity release, the creditors will get, and have to be content with, what they get. The amount available to them makes no difference unless it takes the total revenue to the arrangment over the sum of the total original debt, plus fees and possible statutory interest. Under that sum ay monies released from the pension (or, indeed, equity) merely add to the dividend and does not affect the amount or number of regular contractual payments.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014 http://foggy.blogs.iva.co.uk