£50k pa cap on pension savings from April 2011

Friday 15th October 2010

 

The Financial Secretary to the Treasury has announced the Government’s plan to replace the complex system to restrict higher rate tax relief on pension premiums which was to have come into effect from April 2011.

Under the previous Labour administration, tax relief on pension premiums was to have been restricted depending on the level of earnings – instead, the Coalition Government will introduce legislation to reduce the Annual Allowance to £50,000 and the Lifetime Allowance to £1.5 million.

We expect these changes to mean that the majority of pension savers are not affected, but those with substantial amounts invested may find they have a final tax charge if their pension savings at retirement exceed the lifetime limit.

We will circulate more information on these changes at it becomes available. In the meantime, please contact John Karolczuk Bowman on 020 7556 1293 or your usual contact at Buzzacott if you have any queries.