Any changes on pension allowance tapering

pgalland

Hello,
although the annual allowance is to be raised from £40k to £60k a year, I haven’t heard anything about a change is the tapering rules?
Is it fair to assume that the same tapering rule of £1 reduction in allowance for £2 of income above the threshold still remains? Albeit from a longer sliding scale eg £60k?

HappyHarry

Yes changes here.

Adjusted income threshold up to £260k from £240k and minimum taper is to £10k instead of £4k.

pgalland

Ok - I missed that. 

In practical term does that mean that w the £60k allowance, anyone earning more than £380k won’t be able to contribute into the pension more than £10k tax free?

HappyHarry

Yes.

(Filler)

pgalland

Thank you. 

So just to make sure I am not losing the plot, the only incentive for someone making over £380k to still contribute into a pension, is to have the ability to not be taxed on capital gain / dividend / interest earned within the pension?

artyboy

pgalland said:

Thank you. 

So just to make sure I am not losing the plot, the only incentive for someone making over £380k to still contribute into a pension, is to have the ability to not be taxed on capital gain / dividend / interest earned within the pension?

Well, plus the tax saving on the 10k that you can contribute! That and the fact that at some industry pension schemes have special contribution structures for higher earners so they'll just pay that in for you anyway...

najan49

pgalland said:

Ok - I missed that. 

In practical term does that mean that w the £60k allowance, anyone earning more than £380k won’t be able to contribute into the pension more than £10k tax free?

£360k in fact.

pgalland

Thank you all