Mailings

Tuesday 19 May 2009

Budget 2009 New Rules for Tax Relief on Pension Contributions

The Chancellor's Budget on the 22nd April announced a new set of rules to restrict tax relief on pension contributions for those with income in excess of £150,000 per annum.

These changes are particularly relevant to IPS since our client bank is principally made up of high earners and high net worth individuals. We have therefore produced the attached guidance note to assist you with helping your clients who fall into this category.

Budget 2009 Contribution Tax Relief Guideline.pdf

The definition of relevant earnings for this purpose includes income from savings, investments and dividends. Additionally, it is important to note that overpayments of employer contributions cannot be refunded and will result in a personal tax charge on the employee. As this represents a significant change to the legislation surrounding pension contributions, we propose to send a copy of our guidance note to all clients who are not receiving full income drawdown from their pension arrangements with IPS.

The following letter will accompany the guidance note. However, if you would prefer that we did not send this to any clients you have with IPS, please would you let us know within the next seven days.

Budget 2009 Client Mailshot.pdf

I would like to point out that the role IPS plays in claiming tax relief on pension contributions remains unchanged and the regulations do not require us to police these new rules. We will therefore continue to accept contributions in good faith and process them in the usual way.

If you have any queries on these issues, please speak to your usual contact.

The IPS Partnership