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On 29 November, the tax rules in relation to employer asset-backed pension contributions were changed to ensure unintended excess tax relief could not arise in respect of such contributions, while allowing as much flexibility for employers and pension schemes as possible to manage pension deficits.
The government has published further legislation, effective from 22 February 2012, which will be included in Finance Bill 2012, to limit the circumstances in which such relief can be given.
Under the latest amendment, upfront relief will only be available where the whole total of all asset-backed payments to the pension scheme are to be of fixed amounts.
The new legislation will be of interest to those administering company pension schemes, including sponsoring employers, scheme administrators and trustees.
