Introduction New section 213E The appropriate rate
16.New section 213E(1) sets out how to calculate “the appropriate rate” of the high income excess relief charge. Different rates are to be used according to the relevant amounts of the individual’s total pension savings that were relieved at the basic, higher or additional rates of tax.
17.New section 213E(2) explains how calculation of “the appropriate rate” at new section 213E(1) is amended where the individual’s “specified income” is less than £180,000. Adjustments are made in steps of 1 percentage point for every £1,000 change in income.
18.New section 213E(3) defines reduced net income, as used in working out the appropriate rate to be used for the high income excess recovery charge.
19.New section 213E(4) extends the basic and higher rate bands for the purposes of working out “the appropriate rate” where pension contributions have been made under relief at source or gift aid contributions have been made.