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NICHOLA ROSS MARTIN gets to grips with the complicated pensions tax relief reform
KEY POINTS
- Establishing relevant income.
- Employers’ contributions must be taken into account.
- The tapered rate for income between £150 000 and £180 000.
- The deemed benefit from defined benefit schemes.
- Reporting the new tax charge.
From 6 April 2011 individuals with high incomes will face a restriction on the amount of tax relief that they can obtain by making pensions savings.
The restriction will apply by imposing a ‘high income excess relief charge’ to restrict the amount of higher-rate tax relief that an individual may obtain from making personal or employee pension contributions as well as on those made by employers or third parties for the individual’s benefit when relevant income exceeds £130 000.
For a defined benefit pension scheme the proposed new rules will impose a...
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