ARTICLE · 25 JULY 2012

Weekly Tax Update - Monday 16 July 2012

Smith & Williamson

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At Budget 2012 the Government announced a limit on currently uncapped income tax reliefs which will have effect from April 2013.

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Richard Mannion

1. PRIVATE CLIENTS

1.1. Delivering a cap on income tax relief

At Budget 2012 the Government announced a limit on currently uncapped income tax reliefs which will have effect from April 2013. The cap will be set at £50,000 or 25 per cent of an individual's income, whichever is greater.

The Treasury has now issued a consultation document setting out the scope of the cap. This consultation invites comments on the implementation and delivery of the cap, including, in particular, responses on:

how an individual's income will be defined and calculated for the purposes of the cap;
when the cap will apply; how reliefs will be ordered; and
the operation of the cap through Income Tax Self-Assessment (ITSA).

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