Final countdown for tax relief on pension contributions
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Final Countdown for Tax Relief on Pension Contributions
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Transcript of Final countdown for tax relief on pension contributions
Final Countdown for Tax Relief onPension Contributions
What’s this about?The Chancellor, George Osborne, has recently announced his summer budget is to take place on 8th July, with a view to implementing some of the Conservative pledges from their election manifesto.
The Chancellor’s aim is to continue reducing the UK’s economic deficit and as part of this, other tax increases seem inevitable.One of the tax increases stated in their manifesto was to restrict tax relief on pension contributions for high earners with incomes over £150,000.
Who will be affected?
• The pledged change on pension contributions for high earners will reduce the current level of the annual allowance providing tax relief on pension contributions from £40,000 down to just £10,000 per tax year, if your income exceeds £210,000.
• Whilst the press generally use the phrase ‘high earners’ it’s most likely that an individual’s total income including salary, dividends and other investment income will count towards the £150,000 threshold.
What will the result of this be?• If this change is implemented on 8th July, it’s not clear how will it
affect the carry forward rules that allow an individual to use available annual allowances in the three previous tax years as well as this tax year’s annual allowance and currently, could provide tax relief on pension contributions of up to a maximum of £180,000.
• Higher earners may now be looking at their last chance to maximise both pension contributions and their pension funds.
Talk to a wealth management advisor about what is the best option for you and plan ahead for the future changes.
To find out more about this topic, why not read the whole article by following the link below:
Final countdown for Tax Relief on Pension Contributions
