Disclosure of Pension related Tax Avoidance Schemes
New regulations come into force on 1 September 2009 which will extend the rules requiring disclosure of tax avoidance schemes to include certain pension scheme arrangements.
The new regulations have been put in place as an anti-forestalling measure to counter tax avoidance by high income individuals in advance of the Special Annual Allowance Charge (SAAC) coming into force on 6 April 2011.
The SAAC will apply to pension savings accrued in excess of a special annual allowance for individuals whose relevant income is £150,000 or more.
From 6 April 2011 individuals with an income in excess of £150,000 will have tax relief on pensions savings capped at the basic rate of income tax. The SAAC is intended to restrict relief on excess pensions savings to the basic rate.
The new regulations are intended to keep HMRC informed of any avoidance schemes that seek to avoid the SAAC.
There are also transitional rules in place which will require the disclosure of schemes aimed at avoiding SAAC and which were implemented between 23 April and 31 August 2009.