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Beware of marginal tax rate traps – pensions tax relief

Beware of marginal tax rate traps – pensions tax relief

This week we focus on the pensions tax relief.

One proposal included in the Summer Budget was to reduce the maximum
annual pension allowance of £40,000 if income exceeds £150,000. The proposal is that
the annual allowance will be reduced by £1 for every £2 above £150,000
with effect from April 2016.

If you earn in excess of £210,000 your annual allowance will be capped at £10,000.

It is expected that the £150,000 limit will also include the value of
any employer pension contributions made on your behalf.

The complexity of the pensions regime continues to grow…making it ever more
Important to speak with a qualified financial advisor before taking any action.

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