Restricted Personal Pension Tax Relief for those with high income19th September 2018 | Posted in: Pensions, Savings & Investments, Personal Tax, Planning
For most taxpayers the maximum pension input annual allowance is currently £40,000.
However, from 2016/17 those taxpayers with ‘adjusted income’ over £150,000 and ‘threshold income’ over £110,000 receive a tapered annual allowance. For those affected, the allowance is tapered by £1 for every £2 that their adjusted income exceeds £150,000, down to a minimum annual personal pension allowance of £10,000.
The calculations of ‘adjusted income’ and ‘threshold income’ are complicated and we can assist if you believe that this restriction might apply to you. There are tax efficient ways in which these figures can be reduced so as to minimise the effect of the restriction and we can also advise you about these.