This is an interesting one and follows on nicely from our my last blog.
Some clients have started to enquire if it is possible to offset the proposed income tax increase to 50%. I have detailed the points for this in the previous blog.
However, there is a new special annual allowance of £20,000. This will be applied to any savings made that exceed the normal pattern of your contributions. Savings over and above the £20,000 level will be taxed at 20% for 2009/2010 and 2010/2011. Although not yet finalised, on the introduction of the 50% higher rate tax level, this special tax charge may increase to 30%.
More details can be found in the HMRC document entitled: PENSION SCHEMES: LIMITING TAX RELIEF FOR HIGH INCOME INDIVIDUALS
SPECIAL ANNUAL ALLOWANCE.
This can be found here: http://www.hmrc.gov.uk/budget2009/pensions-technical-1550.pdf
Planning for pensions is key to ensure that the contributions that you make are as effect as possible.
Churchouse Financial Planning Limited is authorised and regulated by the Financial Services Authority
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