contact us

01202 718400

The Conservative Summer Budget 2015

 

The Conservative Summer Budget 2015

Mr George Osborne announced some sweeping changes in his budget yesterday and we thought it relevant to highlight some key changes in our field.

  • Pension contributions for high earners

As mentioned in our previous emails this was always on his hit list and so we have a new tapered annual allowance! In order to limit the amount of tax relieved pension savings that can be made by an individual or their employer each year, the government are tapering the amount you can put in your pension from £40,000 reducing to £10,000 for those earning above £150,000 (this includes the pension contribution). This applies from April 2016. So for earnings of more than £210,000, the maximum pension contribution will be only £10,000.

  • That said we believe that carry forward rules can still be used.
  • Confirmation that the lifetime pension allowance will reduce from £1.25 million to £1 million in April 2016.
  • A Green Paper has been issued relating to pension tax relief and we believe that this could be excellent news if it proceeds on the basis suggested, that is tax free income in retirement! But don’t get too excited, this is only likely to apply for new contributions if the law is changed!
  • Lastly an increase from April 2017 to inheritance tax free allowances for home owners. This is phased in over 4 years, but is broadly welcomed.

If the above tapered annual pension allowances are likely to affect you, please contact your Lewis adviser. Overall the Chancellor delivered a mixed and varied budget.


 

By visiting this page, I accept that I have read and understood the Terms of Business