2021 Budget Changes To Pension Allowance - How Likely To Be Applied Retroactively to 20/21 Tax Year?

Dazed_and_C0nfused

Thrugelmir said:

Tax relief restricted to basic rate tax commencing April 2022. Change is going to fundamental. No tinkering around the edges. 

With the small consolation that the basic rate will have had to rise to 22p by then to pay for Covid-19 😧

Thrugelmir

Dazed_and_C0nfused said:

Thrugelmir said:

Tax relief restricted to basic rate tax commencing April 2022. Change is going to fundamental. No tinkering around the edges. 

With the small consolation that the basic rate will have had to rise to 22p by then to pay for Covid-19 😧

No reason for higher rates of tax not to increase significantly more. 

garmeg

Thrugelmir said:

Tax relief restricted to basic rate tax commencing April 2022. Change is going to fundamental. No tinkering around the edges. 

How are they going to deal with employer contributions, or maybe increase in accrual like the annual allowance test, for higher rate taxpayers in defined benefit schemes?

Thrugelmir

garmeg said:

Thrugelmir said:

Tax relief restricted to basic rate tax commencing April 2022. Change is going to fundamental. No tinkering around the edges. 

How are they going to deal with employer contributions, or maybe increase in accrual like the annual allowance test, for higher rate taxpayers in defined benefit schemes?

Annual allowance is being progressively eroded by inflation. Simply by being left static. 

Levy Employers NIC on employers pension contributions above a certain annual threshold? Treating same as a form of benefit. 

Anonymous101

kinger101 said:

Laws can be made to apply retrospectively, but it's extremely rare.  I'd say the chances of retroactive changes to the pension allowances are practically nil. 

Agreed, I think it would be an absolute nightmare to try and apply removal of higher rate relief retrospectively. So much so that I can't ever see that happening.
More likely a 12 month warning of future change so anything mentioned this year wouldn't come into force until April 2022.

michaels

Anonymous101 said:

kinger101 said:

Laws can be made to apply retrospectively, but it's extremely rare.  I'd say the chances of retroactive changes to the pension allowances are practically nil. 

Agreed, I think it would be an absolute nightmare to try and apply removal of higher rate relief retrospectively. So much so that I can't ever see that happening.
More likely a 12 month warning of future change so anything mentioned this year wouldn't come into force until April 2022.

If they do come up with a way to remove higher rate relief from 22 wouldn't they try to put in place anti-falstalling legislation immediately with regard to annual allowance rollover?