The spirit of simplification

The changes to tax relief on pension contributions set out by Chancellor Alistair Darling in the Budget will be effective from 2011, but the anti-forestalling measures being used in the interim may need some clarification

In this year’s Budget, the Chancellor introduced significant changes limiting tax relief on pension scheme contributions for those with ‘relevant’ earnings over £150,000 pa, tapering down to 20% for those with earnings over £180,000 pa (ie the same as basic-rate taxpayers). The changes are to be effective from 2011. However, the Chancellor has introduced ‘anti-forestalling’ measures to prevent excessive contributions in the interim. In the spirit of the simplification, the guide produced by HMRC explaining the operation of the new regime and the interim proposals runs to 52 pages and ...