Finance Act 2010

48 Extension of special annual allowance charge

(1) Schedule 35 to FA 2009 (special annual allowance charge) is amended as follows.

(2) In paragraph 1(2) (high-income individual)—

(a) in the first sentence, for “£150,000” substitute “£130,000”, and

(b) insert at the end—

“Paragraph 16A makes special provision about cases in which the individual’s relevant income for the tax year 2009-10 is less than £150,000.”

(3) In paragraph 2 (calculation of relevant income)—

(a) in the last sentence of sub-paragraph (1),

(b) in sub-paragraph (2) (in each place), and

(c) in sub-paragraph (3) (in both places),

for “£150,000” substitute “£130,000”.

(4) After sub-paragraph (5) of that paragraph insert—

“(5A) If—

(a) the individual’s relevant income for the tax year (whether that is the tax year 2009-10 or a later tax year) would (apart from this sub-paragraph) be less than £130,000 if the reference in sub-paragraph (5) to a scheme made on or after 22 April 2009 were to a scheme made on or after 9 December 2009, and

(b) the individual’s relevant income for the tax year 2009-10 is less than £150,000,

the individual’s relevant income for the tax year is to be assumed to be less than £130,000.”

(5) In paragraph 11(3)(b), after “22 April” insert “2009”.

(6) After paragraph 16 insert—

“Individuals with relevant income below £150,000 in 2009-10

16A (1) This paragraph has effect if the individual’s relevant income for the tax year 2009-10 is less than £150,000.

(2) References in this Schedule to a pre-22 April 2009 pension input amount are to a pre-9 December 2009 pension input amount.

(3) References in this Schedule to noon on 22 April 2009 are to 9 December 2009.

(4) Other references in this Schedule to 22 April 2009 (except in paragraph 2) are to 9 December 2009.

(5) The reference in paragraph 16(2) to 21 April 2009 is to 8 December 2009.

(6) If the amount arrived at in the case of the individual under sub-paragraph (1) of paragraph 2 for the tax year 2009-10 is less than £150,000, take the steps in that sub-paragraph in relation to the tax year 2007-08 and the tax year 2008-09.

If the result is £150,000 or more for either or both of those earlier tax years the individual’s relevant income for the tax year 2009-10 is to be assumed for the purposes of sub-paragraph (1) to be £150,000.

(7) If there is a scheme the main purpose, or one of the main purposes, of which is to secure that the individual’s relevant income for the tax year 2009-10 is less than £150,000, it is to be assumed for the purposes of sub-paragraph (1) to be £150,000.”

(7) The amendments made by this section have effect for the tax year 2009-10 and subsequent tax years (but see paragraph 21(2) of Schedule 35 to FA 2009).