How contractors will be affected by the new pension tax relief rules
Posted Nov 8, 2010
As part of the Government's ongoing cost cutting measures, new pension rules will apply for from 2011 which reduce the amount of tax relief available on contributions.
The maximum pension contribution limit on which tax relief can apply will be reduced from £255,000 to £50,000 from 6th April 2011.
From 6th April 2012, the lifetime allowance will also be reduced from £1.8m to £1.5m
Some relief to contractors affected by the new rules comes in the form of the 'carry forward' rules which allow taxpayers to roll over any unused pension contributions for up to three years.
The new £50,000 limit is also higher than many commentators predicted prior to the Coalition announcement.
You can read more about the draft legislation on the HMRC website.
Our IFA partner, Contractor Financials, is advising its pension clients to invest as much as they can into their pensions during the current tax year, and take advantage of the 'carry forward' rules in subsequent years to maximise the tax relief available under the new rules.
For more information on contractor pensions, and to discuss your own arrangements with the leading contractor IFA in the market, simply fill in an contractor pension enquiry form.
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