Andrew Penman explains the new rules limiting tax relief available on pension contributions and why they affect some individuals immediately
On 14 October the Government issued definite proposals and draft legislation to reform the system of pension tax relief from 2011/12 onwards. While the changes are very much as suggested in the July 2010 discussion document there are a number of interesting changes with significant implications for many individuals. HMRC has produced voluminous guidance on the new rules including many examples and FAQs for the dedicated reader.
Annual allowance changes
From 2011/12 the annual allowance (AA) will be reduced from £255 000 to £50 000 and there are transitional measures for schemes with pension input periods commencing before 14 October 2010 but ending after 5 April 2011.
Although an AA charge mechanism has existed since ‘A’ day the size of the AA has meant that the charge...
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Andrew Penman explains the new rules limiting tax relief available on pension contributions and why they affect some individuals immediately
On 14 October the Government issued definite proposals and draft legislation to reform the system of pension tax relief from 2011/12 onwards. While the changes are very much as suggested in the July 2010 discussion document there are a number of interesting changes with significant implications for many individuals. HMRC has produced voluminous guidance on the new rules including many examples and FAQs for the dedicated reader.
Annual allowance changes
From 2011/12 the annual allowance (AA) will be reduced from £255 000 to £50 000 and there are transitional measures for schemes with pension input periods commencing before 14 October 2010 but ending after 5 April 2011.
Although an AA charge mechanism has existed since ‘A’ day the size of the AA has meant that the charge...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
