MORE ON THE PENSION LEVY
On Tuesday 10th May 2011, the Minister for Finance announced the introduction of a new tax. It is called a Pension Levy and will be applied on Private Pension Scheme assets. It was included in the government’s announcement on a Jobs Initiative.
The Levy applies to pension scheme assets in the Private Sector only. It is proposed to be 0.6% of the asset value in 2011 and for a further 3 years thereafter.
There are many details absent from the announcement including the range of pension assets affected, when the payment is due and who is liable to pay the Levy. It is expected that the Levy will be deducted from pension scheme assets at source.
Details are expected to be included in the Finance Bill, due for publication on 19th May. It is unlikely that all the practical issues will be fully addressed in the Bill.
Has marginal rate income tax relief been changed?
No further change has been made to marginal rate income tax relief for pension contributions. In his speech, the Minister indicated that he would review any proposal to cut income tax relief in the context of the Comprehensive Review of Government Expenditure, which is due in September.