Amendments to the Finance Bill

The following changes have been made by the Public Bill Committee to the Finance Bill (Budget 2009) which introduced new rules following the budget for high earners and higher rate tax relief. However please remember that there could be further changes before it is receives Royal Assent later in the summer.

The amendments are as follows:

The rules introduced by the Budget 2009 will not apply to anyone who is aged 50 or over during in the tax years 2009-10 and 2010-11. The special annual allowance is to be increased from £20,000 to £50,000.

This means that when working out relevant income to check if it exceeds the £150,000 threshold, you can deduct individual pension contributions of up to £50,000, however this does not apply to any contributions made under net pay arrangements.
The previous two years will no longer be included when checking to see if income exceeds £150,000. You only need to look at earnings in the current year.

The definition of regular contributions has been amended from quarterly or more frequently to annual (or recurring single) or more frequently, although they must be averaged over the last three years.

Please also note that at this time we do not know what the position will be from the 2011/12 tax year onwards.

For the full Budget Report 2009 then click here.

James Pearcy-Caldwell
Director

Dated 30 June 2009 – valid for 6 months. AisaProfessional is a trading style of Aisa Direct Ltd, authorised and regulated by the FSA as Independent Financial Advisers. 1 Fordbrook Business Centre, Pewsey, SN9 5NU

Notes …

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