Budget 2009 – Pension Contributions
From 6 April 2011 the Government intends to restrict tax relief for individuals with an annual income of £150,000 or more. Relief will be withdrawn gradually so that taxpayers earning over £180,000 will effectively achieve a 20% tax deduction, the same as a basic rate tax payer.
Additionally, from 22 April 2009, in certain situations any higher rate tax advantage, on additional contributions above a £20,000 limit, will be subject to a special annual allowance tax charge that will recover tax relief given at above basic rate. This will occur:
- If your income is over £150,000; and
- You make additional contributions in excess of your existing ongoing contributions, and
- Your total pension contributions in the year exceed £20,000 (including contributions made by your employer).