Pension Contributions
You will welcome the new simple arrangements if you have wanted to pay more in pension contributions than allowed by the present rules.
Under the new pension rules, the maximum sum that will attract tax relief will be the lower of your net relevant earnings and the annual limit. This is set initially at £215,000 for the tax year 2006/7.
This figure will increase by £10,0000 per annum, as follows:
Tax year 2006/07: £215,000
Tax year 2007/08: £225,000
Tax year 2008/09: £235,000
Tax year 2009/10: £245.000
Tax year 2010/11: £255,000
Tax Relief on Personal Pension Contributions
All contributions to Personal Pensions will be paid net of basic rate tax and higher rate tax relief will continue to be reclaimed via tax returns.
Sipps-Pensions.co.uk General Disclaimer
The existing minimum allowance of £3,600 for all UK residents under age 75 will continue.
Contributions in excess of the allowance will not be eligible for tax relief. There will also be no restriction on the pension contribution you make in the year that you decide to draw your full pension benefits. However, the Lifetime Allowance still applies.
Maximising Pre-A Day Contributions
The current tax year is the last tax year when carry back will be available. RAP holders can also use carry forward pre-A Day to take advantage of unused allowances from the last six years. Those with capped benefits pensions, for example EPPs, will have an opportunity to make large pre-A Day contributions.
The Effect on Final Salary Pensions
The annual limit will apply to the value of increases to benefits from final salary pensions schemes. A factor of £10 per £1 pa pension will be used to value increases in benefits. Based on a £215,000 allowance, this restricts the annual increase in benefits that will attract tax relief to £21,500.
New SIPP rules - More Pension Freedom for Employers
Under the new SIPP rules, employers will be able to contribute as much as they want, with full tax relief, for employees, provided they can justify it commercially. However, employees will be taxed on any contributions over the allowance as a 'benefit in kind'.
.gif)
Get Expert Pension Help & Advice
Is your pension in the right place for you? Let us guide you. Independent and impartial advice to find the right option for you.
Over 50 and want cash from your pensions?
We can help you get the money you need (up to 25%) from your pension if you are over 50.
Get Expert Pension Help & Advice
Is your pension in the right place for you? Let us guide you. Independent and impartial advice to find the right option for you.
Over 50 and want cash from your pensions?
We can help you get the money you need (up to 25%) from your pension if you are over 50.
