Emergency Budget: Pensions - relief at last!

Posted by PM | on Tue, 22/06/2010 - 16:41 4649 3 comments

A new annual allowance of £30,000 - £45,000 will be introduced, while tax relief will continue to be given at the marginal rate.

Well what a pretty pickle! Finance Act 2010 includes detailed and complex measures to raise a tax charge on pension contributions for the very highly paid – wrapping in not only those with income of more than £150,000 a year, but also employees with income in excess of £130,000 who will have their employer pension contributions treated as income.

Continued...

Typo

mikewhit | Tue, 22/06/2010 - 18:40 | Permalink

"reigning in the amount" - should be "reining" (think horses, not royalty !)

Nay, and thrice neigh

RebeccaBenneyworth | Tue, 22/06/2010 - 18:43 | Permalink

Sorry, the sun has got to me!! I'll correct it now!

And for those who missed it, it now says "reducing"!

Tax relief on pension contributions

ianjemmett | Wed, 23/06/2010 - 09:29 | Permalink

My understanding is that tax relief is not given at the highest marginal rate if your highest marginal rate of Income Tax is 50%. I had lengthy discussions with the technical experts at Skandia about this recently and we concluded that someone has to use all their 40% relief before any 50% relief will be granted.

Most people will not be affected, admittedly, and if the eligible contribution limit is limited to somewhere between £30,000 & £45,000 it won't matter anyway. But if my current understanding is correct we need to stop telling people they will get relief at their highest marginal rate.

Ian