UK. Pensions tax loophole caused by election
Next month’s snap election forced the Government to abandon a number of previously announced policies in the Finance Bill that was going through Parliament when Theresa May made the surprise announcement.
One of the policies culled was a cut in the amount you can save into a pension each year, from £10,000 to £4,000, for those who have already used the “pension freedoms” to access their pot. There was no change for people yet to touch their pension, they can continue to save £40,000 a year.
This cut to the “money purchase annual allowance” was meant to apply from April this year, but has not yet been made into law.
As a result, pension experts say a window has opened up that means savers could continue to benefit from the higher £10,000 allowance this year.
Tax rules mean any pension contributions made above the annual or lifetime caps will face a charge in order to reclaim the tax relief that applies to pension contributions.
Jennie Kreser, a partner at Silverman Sherliker, the law firm, said it would be “incredibly crass” of HMRC if it tried to charge savers who make contributions of over £4,000 this year.
Full Content: Telegraph
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