Jersey Pension changes
The changes to Maximum contributions for tax relief
which come into effect on 1st Jan 2012 are outlined
below.
The combined limit of annual contributions into all pension
schemes can not exceed £50,000 or the related earnings during the
year of assessment, which ever is the lower. Related earnings is
specifically defined in the income tax law but is generally:
- income arising in respect of salary and wages from employment
and;
- income from the carrying on of a trade or profession or, as a
partner of a business.
From 2012 the combined limit of the qualifying
contributions which are eligible for relief will be restricted
if an individual's total income exceeds £150,000. In the case
of a married couple, each spouse will have their own £150,000
limit.
A tapering provision applies under which an individual
whose total income is only just over the £150,000 limit will not
immediately lose all of the tax relief available on their pension
contributions. Under this provision the combined total
contributions eligible for tax relief are reduced by £1 for every
£1 that the individual's total income exceeds £150,000.
In effect once you have total income in excess of £200,000, you
will obtain no tax relief for making contributions into a pension
scheme. It is important that you consider this when making
contributions into your pension from January 2012 onwards.
Should you require further information, or an evaluation of your
individual situation, please contact Stephen Phillips on 01534 753753.
