Chancellor George Osborne is set to deliver his post election Budget on 8 July and it’s widely predicted that he’ll announce a restriction on pension tax relief for those earning in excess of £150,000p.a.
The ‘pension raid’ is necessary to pay for increased inheritance tax breaks as announced in an earlier manifesto and professional bodies predict that it will be implemented via a tapering of the annual pension contribution allowance from £40,000 to £10,000 for those earning in excess of £150,000. Individuals earning above £210,000 will then receive relief on only £10,000 of pension contributions.
Assuming these changes are announced, there’s uncertainty around when they’re likely to take effect. The cautious approach is to assume any changes are effective from 8 July and so now is probably the best time to consider making additional pensions contributions.
Our tax professionals can help you understand your options and advise you accordingly. Please email [email protected] or call Helen on 01527 558539 for more information.