Category: Other

New pension rules: 2020/21

16 Apr 2020

New pension rules are now in effect. It is thought that these new rules, whilst applying to everyone, will particularly benefit doctors and medical consultants who face large tax bills on extra pay.

Since April 2020, the ‘threshold income’ and ‘adjusted income’ limits that are used to calculate the tapered annual allowance have increased by £90,000. This means individuals with a ‘threshold income’ of between £110,000 and £200,000 and ‘adjusted income’ between £150,000 and £240,000 will no longer be impacted by the tapered annual allowance. (Note, adjusted income is all income plus any pension contributions paid by an employer). This means a full £40,000 can be contributed into a pension plan in the tax year, either by the individual, the employer or indeed a combination of both, as long as the £40,000 is not exceeded.

Colin Burns, Partner at Gerald Edelman, explains more in his article here.

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