FT - Tories to raid tax relief pensions

Paul_Herring

Sharing accomodation is no different from sharing a bottle of wine

Of course it is. Two people can share a house, without infringing on the other's use of it. They don't get "half a house each" - they both have all of it.

Two people sharing a bottle of wine only get half that bottle each.

For a couple to get the same utility as a single person from a bottle of wine, they'd need to buy two bottles of wine. Not so with the house.

Leaky abstractions FTW!

zagfles

Paul_Herring said:

Sharing accomodation is no different from sharing a bottle of wine

Of course it is. Two people can share a house, without infringing on the other's use of it. They don't get "half a house each" - they both have all of it.

Two people sharing a bottle of wine only get half that bottle each.

For a couple to get the same utility as a single person from a bottle of wine, they'd need to buy two bottles of wine. Not so with the house.

Leaky abstractions FTW!

So single people can share a house with another single person then! Problem solved, no "infrigment" on their use, according to you!

Mick70

On bbc news it mentions tax paid on pensions of high earners including doctors to be recalculated .
so what exactly has changed ? That’s all the bbc says 

Mick70

https://www.ft.com/content/517b2687-331d-4fca-b080-ce531c074035

Makes sense now ,  seems like had no intention of amending the LTA 

Paul_Herring

Mick70 said:

On bbc news it mentions tax paid on pensions of high earners including doctors to be recalculated .
so what exactly has changed ? That’s all the bbc says 

The taper thresholds where the £40,000 you're allowed to put into a pension reduces have been increased by £90,000

https://www.fidelity.co.uk/retirement/tapered-annual-allowance/

£110,000->£200,000

£150,000->£240,000

£210,000->£300,000

Edit: Your FT link is paywalled.

Gary1984

The tapering down of the annual allowance now starts at £200k instead of £110k. So you can earn up to £200k and still be entitled to pay £40000 into your pension (or accrue the equivalent benefits in a DB scheme) like everyone else. 

ratechaser

Let's just reflect on that taper change for a moment. Anyone with an adjusted income between £210-240k (ahem...) and who wants to maximise their pension allowance, ends up with an effective tax rebate of £13,500, i.e. 45% of the £30k pension allowance that they will be getting back from no longer being tapered down to the £10k minimum.

By any measure that's extraordinarily generous, and could be the equivalent of about 15% of the tax paid on their whole income.

All in all, not a bad budget!

marlot

ratechaser said:

Let's just reflect on that taper change for a moment. Anyone with an adjusted income between £210-240k (ahem...) and who wants to maximise their pension allowance, ends up with an effective tax rebate of £13,500, i.e. 45% of the £30k pension allowance that they will be getting back from no longer being tapered down to the £10k minimum.

By any measure that's extraordinarily generous, and could be the equivalent of about 15% of the tax paid on their whole income.

All in all, not a bad budget!

If they're putting that much in, they will probably be a 40% taxpayer in retirement.
But as you point out, edge cases can be interesting for the (small) group of people involved.

ratechaser

marlot said:

ratechaser said:

Let's just reflect on that taper change for a moment. Anyone with an adjusted income between £210-240k (ahem...) and who wants to maximise their pension allowance, ends up with an effective tax rebate of £13,500, i.e. 45% of the £30k pension allowance that they will be getting back from no longer being tapered down to the £10k minimum.

By any measure that's extraordinarily generous, and could be the equivalent of about 15% of the tax paid on their whole income.

All in all, not a bad budget!

If they're putting that much in, they will probably be a 40% taxpayer in retirement.
But as you point out, edge cases can be interesting for the (small) group of people involved.

Not if 'they' can help it! A couple with decent DC pots can draw a combined £100k pension income at an effective marginal tax rate of 13.33%. And I'm sure there are plenty of other tax efficiencies for those with more extravagant lifestyles.

As for me, no interest in yachts, horses or gold digging trophy wives 

marlot

ratechaser said: 

Not if 'they' can help it! A couple with decent DC pots can draw a combined £100k pension income at an effective marginal tax rate of 13.33%....

I think you mean an overall tax rate of 13.33%.  The marginal tax rate [ie the tax they'd pay for an additional £1 of income] for someone earning £50,001 is 40%.
Plus, of course, they'll probably trigger the lifetime allowance if they have a big enough pot to sustain £50k a year.