Introduction Background Note
84.The Schedule restricts tax relief for pension contributions by or for the benefit of high income individuals. It follows a formal consultation which concluded on 3 March 2010. A consultation document “Implementing the restriction of pensions tax relief” was published on 9 December 2009 and a document summarising responses to the consultation “Implementing the restriction of pensions tax relief: a summary of consultation responses” was published on 24 March 2010.
85.This charge is on pension contributions for individuals whose gross income is £150,000 or more and whose relevant income is £130,000 or more. The charge will apply to all pension contributions to registered pension schemes (including deemed contributions to defined benefits or cash balance schemes), whether paid by or on behalf of those individuals or by their employer for their benefit. The charge restricts the level of tax relief to basic rate tax at 20 per cent. But, where the individual has gross income of £150,000 to £180,000 the amount of tax relief is tapered from their marginal rate of tax (up to 50 per cent) to 20 per cent. The charge will come into force with effect from 6 April 2011.