Budget 2012 :- Income Tax Relief Capped

21 Mar

For those who contribute to pensions, the government is introducing a cap on income tax relief for anyone claiming more than £50,000 a year.

For those seeking to claim more than £50,000 of tax reliefs, a cap will be introduced at 25% of income. The plan is to prevent the business activity of setting-up loss making businesses purely to claim tax relief i.e. offset trading losses against trading profits. George Osborne confirmed that the limit will include, amongst others :-

  • Loss reliefs against total income
  • Qualifying loan interest
  • Gift Aid and Charitable gifts of land and shares

The government said it would seek to ensure the cap did not impact on charities that rely on large donations and there would be measures to protect philanthropic giving.

The good news is the chancellor has not cut pensions tax relief.

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