Professional Renaissance Limited is a limited company registered in England under company number 6380089. Our registered office address is: The Business Store, 98-100 High Road, Rayleigh, Essex, SS6 7AE.
Tax year end 2016
The Budget 2016
Tax dates 2016/17
High Earners Beware
From April, high earners will see the most they can put into a pension drastically reduced and the lost tax relief could amount to £13,500 a year.
The annual allowance is currently £40,000 for most high-earning individuals, but from 6 April 2016, this figure will be whittled away by £1 for every £2 of income over £150,000. The annual allowance could fall as low as £10,000 for those earning in excess of £210,000.
What will be tested against the annual allowance is more than just salary. It includes bonuses, the value of employer pension contributions, and other sources such as dividend and rental income. It is estimated that those with salaries of £90,000 or more could be affected.
Contributions in excess of the reduced annual allowance don’t just lose tax relief on the way in; they themselves attract a tax penalty.
Because the changes won’t be brought in until 6 April 2016, smart investors with the ability to fully fund their pension and carry forward pension contributions will ensure they benefit from tax relief under the current regime.
If you have sufficient earnings and available allowances, by using the carry forward rule you could add up to £180,000 to your pension this tax year and receive up to £81,000 in tax relief. Good news if you have the ability to make such large contributions, but thankfully smaller sums will benefit too.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.