Commentary

31.3 Tax relief on taxpayer’s contributions

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

31.3 Tax relief on taxpayer’s contributions

| Commentary

31.3 Tax relief on taxpayer’s contributions

There are also major changes in relation to the maximum amount of contributions which a taxpayer may put into a pension scheme. As from 6 April 2006, each taxpayer is prima facie entitled to tax relief on all contributions up to the amount of his earnings for the year1. There is, however, a sting in the tail. Where an individual’s total pension input for a tax year exceeds his annual allowance, the excess is charged to income tax at the rate of 40%2. This annual allowance for the tax year 2010/11 is £255,0003.

In the

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