This note which describes changes to the United Kingdom tax
regime relating to pensions will be of interest to entities with UK
operations and employees.
Background
In spring 2009, the then Labour Government announced detailed
and complex changes to the system of tax relief applicable to
members of UK pension plans. The changes were to be effective from
April 2011. In the interim, an "anti forestalling" regime
was introduced which effectively limited pension contributions and
accrual for many higher rate tax payers, to prevent higher
contributions being made in the two years before the proposed
restrictions on tax relief came into force.
Immediately after the spring election the new
Conservative/Liberal Democrat Government (the
"Coalition") announced that it would scrap the Labour
proposals. The Coalition then carried out a consultation, over
summer 2010 on the possible approaches to restricting pension tax
relief.
