Possible Cut In Pension Tax Relief For Higher Rate Taxpayers

With the 2012 Autumn Statement fast approaching, there are a few details leaking out about planned proposals and announcements. One of the latest, revealed by the Financial Times, is that the Chancellor is mulling over reducing tax relief again, this time from £50,000 to £40,000 or £30,000. Other sources feel there may be a removal of the amount of money higher rate tax payers can get additional tax relief on altogether. Tax relief on pension contributions is subject to limits imposed annually - at the moment £50,000. So you can pay up 100% of your income into your pension but will only receive tax relief up to £50,000 of the contribution. This has already been reduced drastically since 2011, prior to which it was £255,000.   There are likely to be changes ahead - very soon as any announcement will be made on December 5th. If you have not made use of the full allowance in previous years, you may be able to carry forward the allowance and make additional contributions this year.