The Finance Act Comes Into Force

The Finance Act 2009 received Royal Assent last night.

Anti-forestalling: a recap

From April 2011, for individuals with income of £150,000 or more, tax relief on pension contributions is to be tapered downwards so that it falls to 20% for those with income over £180,000. The promised consultation on this change is still awaited.

The Act contains "anti-forestalling" provisions intended to prevent individuals likely to be affected by this change from making "substantial additional pension contributions" between Budget Day (22 April 2009) and April 2011. The proposals outlined in the Budget were that if an individual with income above the £150,000 threshold changes their normal pattern of pension contributions and their pension savings exceed £20,000 per tax year (the "special annual allowance"), tax relief on those savings will only be at the 20% basic rate.