Summary
1.Section 72 and schedule 35 introduces an income tax charge at 20 per cent for certain individuals on certain pension contributions and benefits accrued. This special annual allowance charge is on pension contributions and benefits accrued in excess of a special annual allowance of £20,000 for individuals whose relevant income is £150,000 or more. This may be increased up to £30,000 for those with a pattern of non-regular pension savings. The special annual allowance charge will not apply in respect of an individual’s normal pattern of regular pension contributions or the normal way in which their pension benefits accrued before 22 April 2009. The schedule also enables high-income individuals to ask their schemes to refund pension contributions that they have paid in the 2009-2010 tax year, which may otherwise create a liability to the special annual allowance charge. The repayments are subject to a 40 per cent income tax charge on the scheme, recovering the individual’s tax relief.
