Rates and Allowances - Pension Schemes
| Tax Year | Amount (£) |
|---|---|
| 2006 – 2007 |
£1,500,000 |
| 2007 – 2008 | £1,600,000 |
| 2008 – 2009 | £1,650,000 |
| 2009 – 2010 | £1,750,000 |
| 2010 – 2011 | £1,800,000 |
Member Contributions
There is no limit on the amount that an individual can contribute to a registered pension scheme. If you are a UK resident aged under 75 you may receive tax relief on your contributions to a registered pension scheme. Tax relief is limited to relief on contributions up to the higher of
Any amount of contributions paid over the annual allowance will be liable to the annual allowance charge.
| Tax Year | Amount (£) |
|---|---|
| 2006 – 2007 |
£215,000 |
| 2007 – 2008 | £225,000 |
| 2008 – 2009 | £235,000 |
| 2009 – 2010 | £245,000 |
| 2010 – 2011 | £255,000 |
Notional Earnings Cap
Before 6 April 2006 the rules of many pension schemes limited the amount of benefits that could be provided or contribution paid by reference to the permitted maximum under s590C ICTA 1988. Although section 590C ICTA 1988 was repealed on 6 April 2006 the permitted maximum can continue to apply to registered pension schemes for a period up to 5 April 2011 because of regulation 4 of The Registered Pension Schemes (Modification of the Rules of Existing Schemes) Regulations 2006 – SI 2006/364.
If section 590C had not been repealed on 6 April 2006, a Treasury order would have stated the permitted maximum figure for the tax years as follows;
| Tax Year | Amount (£) |
|---|---|
| 2006 – 2007 |
£108,600 |
| 2007 – 2008 | £112,800 |
| 2008 - 2009 | £117,600 |
Tax charges on payments from registered pension schemes
There are a number of special tax charges that apply to special payments made from registered pension schemes. These are listed below. The normal income tax rates apply to ordinary pensions payments made from pension schemes.
| Charges | Rates |
|---|---|
| Lifetime allowance charge | 55% - if the amount over the lifetime allowance is paid as a lump sum 25% - if the amount over the lifetime allowance is not taken as a lump sum |
| Annual allowance charge | 40% |
| Unauthorised payments charge | 40% |
| Unauthorised payments surcharge | 15% |
| Short service refund lump sum charge | 20% on first £10,800, 40% on amounts over £10,800 |
| Special lump sum death benefits charge | 35% |
| Authorised surplus payments charge | 35% |
| Scheme sanction charge | 15% - 40% |
