Higher rate tax relief on pensions to stay
Claims that the government is still considering abolishing higher rate tax relief on pension contributions have been firmly rejected by Treasury financial secretary Ruth Kelly.
In the House of Commons she repeated Treasury statements that ‘no proposal for the abolition of higher-rate tax reliefs has even been considered by Treasury Ministers, never mind agreed.’
But Kelly omitted to give the same assurance concerning reports that the tax-free status of lump sum payments on retirement is under threat.
Kelly insisted huge cuts in corporation tax have offset the £5bn a year cost to pension funds of advanced corporation tax relief and said what matters is the level of pension contributions.