Tax relief on pensions (150K plus)

Pete111

green_man wrote: »

Yes the devil will be in the detail.

I Assume that they will restrict max rebate to 40% thus no addition advantage for those above 150K. It would be nonsensical to have a cliff edge whereby all relief was lost as this would simply result in these people putting nothing into a pension.

Don't really have an issue with only getting 40% relief.

However there is talk of making it basic rate only if you earn over 150k...how on earth would that be fair when you could earn up to 149.99k and get twice as much tax relief on your pension!?

Waldorf_Statler

It would be about as fair as restricting child benefit to a household where one parent earns £60k but offering to a household earning £98k (where two parents earn £49k each).

gadgetmind

Pete111 wrote: »

I'm assuming that the 150k mark mentioned is only taxable income - ieif I pile additional pension funds in (up to the 40k maximum) then these monies won't be counted. Anyone kbnow if that is correct?

Yes, that's also what I'm wondering. I max out my pension via sal sac, and thereby avoid 45% tax, but I've got a feeling the sods will want their extra pound of flesh to top up the few stones they've already had off me!

Pete111

gadgetmind wrote: »

Yes, that's also what I'm wondering. I max out my pension via sal sac, and thereby avoid 45% tax, but I've got a feeling the sods will want their extra pound of flesh to top up the few stones they've already had off me!

Tell me about it! I've recently taken on a much bigger role with the additional remuneration (and hassle.....) I know I'm fortunate to be a high earner but I swear every time I get a bump up a tax change bites me in the backside.

A few years back I was heading towards 100k and Gordon Brown removed the tax free allowance later leaving me putting money into pensions to avoid 62% on my earnings. Now I'm past that and it looks increasingly like if I make over 150k then I'm going to be a) taxed at 50% and b) going to scupper my pension.

Don't even get me started on having a kid 2 weeks before child allowance was removed....;)

gadgetmind

Pete111 wrote: »

Now I'm past that and it looks increasingly like if I make over 150k then I'm going to be a) taxed at 50% and b) going to scupper my pension.

I'm lucky enough to be rather later in my career, so TBH will probably just knock work on the head when all these new changes start to bite.

EdSwippet

gadgetmind wrote: »

I'm lucky enough to be rather later in my career, so TBH will probably just knock work on the head when all these new changes start to bite.

Me too. I will be 55 this year, and have already started getting my ducks in a row to move to drawdown and/or take whatever LTA fixed protection is offered. I had intended to work another five years or so (by choice rather than need), but the tax clobbering I would take from doing that makes it deeply unattractive versus simply retiring earlier. So... I'm out.

These are the sorts of nonsense economic distortions that conservatives are supposed to fix, not cause. It's all very odd.

gadgetmind

The way I see it, in a 1/2 year's time.

1) Tax will be up at confiscatory levels.
2) I won't be allowed to put anything else into a pension without being taxed on it.
3) I won't be qualifying for any more state pension, but will still be paying huge amounts of NI.

So, if HMG hates successful people, then I might as well give it up entirely, or move somewhere where my skills are valued rather than punished. I know there are huge numbers of people thinking along exactly these lines, and I really can't fault their logic.

jamesd

Pete111, gadgetmind, here's where it's handy to observe that at least you have good choices, not those of people with debt or other money issues. Nice incomes and lots of capital have their troubles but they beat the alternatives.

gadgetmind, just wonder how long you can stand living in Portugal to get out all of your pension pot tax free using their 0% income tax on foreign income rule. Think how much HMRC will enjoy issuing your pension provider with an NT tax code or refunding all of the tax deducted when you apply for a refund because you're not UK resident.

Pete111

jamesd wrote: »

Pete111, gadgetmind, here's where it's handy to observe that at least you have good choices, not those of people with debt or other money issues. Nice incomes and lots of capital have their troubles but they beat the alternatives.

Absolutely - first world problems and all that.

gadgetmind

jamesd wrote: »

Pete111, gadgetmind, here's where it's handy to observe that at least you have good choices

I'd prefer to say that we made good choices, almost certainly starting at school. In my case, this school was in a Lancashire mining town, where the mine had closed, so I'd argue that which school isn't critical.

gadgetmind, just wonder how long you can stand living in Portugal to get out all of your pension pot tax free using their 0% income tax on foreign income rule.

Both Portugal and Cypress beckon. However, we'd have to avoid blighty for five years afterwards or HMG would stitch us up for UK tax.

Think how much HMRC will enjoy issuing your pension provider with an NT tax code or refunding all of the tax deducted when you apply for a refund because you're not UK resident.

I don't mind paying "my share" but just hate the vilification of anyone who's actually paid attention at school and worked hard thereafter.

I'm getting close to the f it all stage, and fancy reducing my income to such a level that society likes me again.