Sir Winston Churchill once said of the Americans that they can be relied upon to do the right thing, once they have exhausted every other alternative. Perhaps so with this Tory Government.
Having caused the exodus of some highly skilled employees from the NHS and other Government departments by their ham-fisted pension regime announcements in the recent past (yes, you’ve guessed it, Osborne) they have finally woken up and dealt with the inhibiting lifetime allowance, which function to penalise successful fund management. Mr Hunt actually went further than predicted by many pundits by abolishing rather than simply raising the lifetime allowance threshold. Politically I think he might have been wiser to have raised the threshold substantially rather than completely abolishing it, enabling Shadow Chancellor of the Exchequer, Rachel Reeves, to direct some typically ill-informed criticism at him.
The increase in the annual allowance from £40,000 to £60,000 was both unexpected and welcome.
In terms of my clients, there seems to be a great opportunity for business owners with successful, cash rich companies to increase corporate contributions into their pension pots. For many, this may now secure Corporation Tax relief at the marginal rate of 26.5% or at the main rate of 25%.
The only concern would be what the socialists do in the next election, Rachel has pledged to reverse this measure and the exodus from the NHS of highly skilled consultants and doctors might resume. Perhaps somebody can have a quiet word with her.
Posted by Paul Short
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The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.