Posts tagged ‘Tax Relief’

If you have a pension, then you are about to see a significant reduction in the amount of money you can put into it without paying tax.

From next April

The Government will slash the annual tax relief limit on pensions from £255,000 to £50,000. There will also be a reduction in the lifetime allowance on money that can be saved in a pension fund from £1.8 million to £1.5 million, which will come into effect from April 2012.

The Government hopes the changes will save it more than £4 billion a year, which it will use to tackle the budget deficit.

Warning

Experts have already warned that some people with long service in final salary pension schemes could suddenly face higher bills, particularly as the increase in accrued pension will now be multiplied by a factor of 16 instead of the current factor of 10.

However, the Government says that the changes would affect 100,000 pension savers a year, 80% of whom earned more than £100,000 a year, meaning that very few people earning less than that amount would actually have to pay any pension tax.

Utilising your allowance

Anyone with unused annual allowance from the last three tax years will be able to carry them forward if they are a member of a pension scheme during that period, meaning that if a pension contribution is more than £50,000 then they may not have to pay the annual allowance charge.

At George Hay, we can advise you on all aspects of pensions, including how the above changes might affect you.

For further information on whether you are getting the best from your pension, please contact us.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

The Finance Act 2010 introduced a new definition which Charities (and Community Amateur Sports Clubs) will need to adopt in order to ensure it remains entitled to tax relief.

Management Condition

The new definition introduces the term ‘management condition’ and states that managers must be deemed to be fit and proper persons to manage the charity.  The term manager is deemed to relate to any person who has day to day control over the running of the charity and any persons who can assert influence over its running.

Fit and Proper Declaration

An individual is considered ‘fit and proper’ if they ensure that charity funds and tax reliefs are used only for charitable purposes.  HMRC have advised that all managers should sign a declaration as to whether they are ‘fit and proper’ they suggest a person declares the following:

  1. I am not disqualified from acting as a charity trustee
  2. I have not been convicted of an offence involving deception or dishonesty
  3. I have not been involved in tax fraud
  4. I am not an undischarged bankrupt
  5. I have not made compositions or arrangements with my creditors from which I have not been discharged
  6. I have not been removed from serving as a charity trustee or been stopped from acting in a management position within a charity
  7. I have not been disqualified from serving as a Company Director
  8. I will at all times ensure the charity’s funds and charity tax reliefs received by this organisation are used only for charitable purposes

More paperwork….

For most people this will not be too onerous a declaration and will only be a question of form filling to ensure you have the paperwork in place should it ever be requested. Another example of red tape that could prevent your charitable status from being challenged, which could have catastrophic tax consequences.

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.