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Pre-Budget Report
At Budget 2009 and the 2009 Pre-Budget Report, the Government announced changes to pensions tax relief for high income individuals to ensure that it remains fair, affordable, and sustainable.
From April 2011 tax relief on pension contributions will be restricted for individuals with gross incomes of £150,000 and over, where gross income incorporates all pension contributions, including the value of any benefit funded by, or eventually funded by, an individual's employer. Tax relief will gradually be tapered away so that above £180,000 it is worth 20%, the same rate received by a basic-rate income taxpayer. To provide more certainty for individuals around whether they are affected, and to reduce administrative burdens for schemes, this will be subject to an income floor at £130,000 of pre-tax income (excluding the value of any employer pension contributions).
The Government has launched a formal consultation on the implementation of the restriction and welcomes responses from interested stakeholders. The consultation will run for 12 weeks until 3rd March 2010 and will allow core legislation to be in place ahead of implementation in 2011, providing certainty for those affected. A consultation Impact Assessment is included in the document.
Implementing the restriction of pensions tax relief is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
