If you are over 55 and have accessed any of your pension this affects you, so read on…
In Philip Hammond’s 2016 Autumn statement he first introduced the idea that the £10,000 limit on new contributions to pensions for those who had already accessed any of their possible 25% tax free cash would be slashed by a massive 60% to just £4,000 per annum. Although these plans were confirmed in the 2017 Finance Bill, the government did a massive turnaround in April of this year once plans for the snap general election had been announced. Other equally unpopular measures were also shelved at the same time, such as the proposed reduction of the tax free dividend allowance also by 60% from its current £5,000 per annum to just £2,000 per annum from 2018-19.
This latest “Finance Bill 2” which has been announced yesterday to be introduced in the autumn legislates for a number of policies which have already been announced and includes a number of provisions which will apply from the start of this 2017-18 tax year, including this reduction in the money purchase annual allowance to £4,000.
It is estimated that there will be many individuals who have already exceeded this amount in the first three months of this following the earlier announcement that the rate was to he held at £10,000.
To read the full article from The Professional Adviser please click here
For the full updated draft legislation of the Finance Bill (2) published on Thursday please click here
As always, please don’t hesitate to contact us if you require any further information about any of these measures.