Are you about to lose some of the tax relief on your pension contributions?
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11 November 2011
If you are a higher rate taxpayer and you make pension contributions read on to see if you might be affected.
During the last week speculation has been mounting that the higher rate tax relief obtained on pension contributions may be about to be removed. If such an announcement is to be made, it is likely to be during George Osborne's Autumn Statement on 29 November.
We have seen nothing to confirm such an announcement will be made and the Treasury have denied it. But with the bleak economic situation and both Labour and Liberal Democrat support for the change it does appear that the idea may be gaining momentum.
The anticipated worse case scenario is that the removal of higher rate tax relief is announced in the Autumn Statement and has immediate effect. More likely, however is that any change will take effect from 6 April 2012 at the earliest, but there are no guarantees.
Can you minimise the impact?
If you are a higher rate taxpayer and you maximise your contributions each year and plan to use the carry-forward concessions introduced in April 2011, you could consider accelerating your contributions to remove the risk of losing the relief.
The potential removal of higher rate relief on pension contributions is merely speculation at the moment. If you would like further advice please speak to one of our Financial Planning Consultants on 01242 680000.
If any announcement is made on 29 November we will include it in our 'Autumn Statement round up'.