Neville Bramwell and Olivia Biggs provide analysis on pension schemes and the ‘alternative approach’
HMRC’s publication ‘Restriction of pensions tax relief: a discussion document on the alternative approach’ sets out in more detail the proposal made in the emergency Budget that the HIER charge (enacted in FA 2010) should be abandoned in favour of a simpler system so long as the tax yield promised by the HIER could be matched by any alternative solution.
The favoured alternative involves a number of changes including: a reduction in the annual allowance (AA) from £255 000 to somewhere between £30 000 and £45 000; a more realistic accrual rate factor for calculating the value of pension inputs in defined benefit (DB) schemes a probable modest reduction in the lifetime allowance (LTA) which is currently £1.8m; and the removal of some current exemptions.
The HIER charge...
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Neville Bramwell and Olivia Biggs provide analysis on pension schemes and the ‘alternative approach’
HMRC’s publication ‘Restriction of pensions tax relief: a discussion document on the alternative approach’ sets out in more detail the proposal made in the emergency Budget that the HIER charge (enacted in FA 2010) should be abandoned in favour of a simpler system so long as the tax yield promised by the HIER could be matched by any alternative solution.
The favoured alternative involves a number of changes including: a reduction in the annual allowance (AA) from £255 000 to somewhere between £30 000 and £45 000; a more realistic accrual rate factor for calculating the value of pension inputs in defined benefit (DB) schemes a probable modest reduction in the lifetime allowance (LTA) which is currently £1.8m; and the removal of some current exemptions.
The HIER charge...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
