4:10 am, October 24, 2010
THE Treasury has announced important new rules on the reduction of tax relief on pensions – rules which will affect car dealers.
In effect the announcement means the annual amount of tax-free income that savers can put into their pensions will be drastically reduced from £255,000 to £50,000 in April – bad news for high-earning car dealers.
The new rules will apply to all taxpayers, including high earners with a simple cap on total annual pension contributions of £50,000.
However, it has been revealed that under certain situations it may be possible to exceed this cap if there is unused allowance in the previous three years of contributions.
Approximately £4bn each year will be raised by the Treasury with the measure, which aims to provide ‘a solution that will help to tackle the deficit without affecting those individuals on low and moderate incomes’, the department says.
In order to maximise the tax savings available to them, higher earning car dealers are urged to review their level of pension contributions between now and the end of the tax year.
by JAMES BATCHELOR
