Budget 2008 - Pension Tax Relief
Firstly, charities were concerned that they would lose out because Gift Aid donations would only benefit from 20% income tax relief with a resulting reduction in the gross donation.
Secondly individuals making personal pension contributions would only benefit from 20% tax relief at source instead of 22%. For instance a personal pension contribution of £78 would be worth £100 after basic rate tax relief in 2007/08. After 6th April the same £78 contribution becomes £97.50 after basic rate tax relief. This represents a small but significant reduction in your pension fund. Higher rate tax payers can claim back a further 20% through self assessment, increased from the previous 18% but the gross pension premium is still reduced for the same initial investment.
It was pleasing to see the Chancellor act on the concerns of charities and add 2% relief to Gift Aid donations for a transitional period.
It was a shame that the same generosity was not extended to the millions of us trying to save for our retirement.
Date: 12th March, 2008
Articles from this Author
29th August, 2013
Stock and shares ISA qualifying investments extended
18th June, 2013
Protecting yourself from the Pension Lifetime Allowance Reduction
5th April, 2013
ISAs - an investment for all seasons?
22nd March, 2013
Pensions for individuals - Budget 2013
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole