Gabelle Tax Analysis: The cap on Income Tax Reliefs
Cap on income tax reliefs
From 6 April 2013 there will be a cap on the amount of income tax reliefs that can be claimed by an individual. The cap will be the greater of £50,000 or 25% of income. Only reliefs which are currently unlimited will be subject to the cap. Income tax reliefs which are already subject to a specific limit, e.g. pension contributions and EIS investments, will not be subject to the £50,000 cap.
Paula Tallon said “The cap on income tax reliefs will have a direct impact on charitable donations as well as on individuals claiming relief for qualifying interest. While this measure is clearly targeted at cases where the reliefs are abused it is inevitable that taxpayers with genuine transactions will be penalised.”
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