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Tips to maximise tax relief on pensions contributions
People trying to maximise their pension tax planning can save money through salary sacrifice and a focus on levels of taxable income, according to an expert.
In an article for Citywire, Andrew Tully, senior pensions policy manager at Standard Life, advised that the country's high earners can enjoy tax relief of up to 65 per cent by using salary sacrifice rules that allow them to sidestep some of the forthcoming rises.
Salary sacrifice allows people to give up some of their salary in return for an employer pension contribution, which can bring significant tax efficiency savings for those with higher incomes.
"Non-income producing wrappers, such as bonds, will be useful for keeping people below the key income thresholds," he went on to say.
"Those with incomes of more than £130,000 should consider paying as much as they can towards pensions this year and next while higher rate relief is available."
It follows news that HM Revenue & Customs has gained the right to pursue retrospective taxes on offshore earnings after winning a High Court ruling.
Posted by Fiona Beck.
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