Compulsory pension contributions - NEST

From 2012, millions of workers will be auto-enrolled into pension schemes to which employers and employees will have to contribute.

State Pension Age Increases

As a part of the 2010 Spending Review, the Government has formally announced a number of changes to state pension benefits, which include:

The pace at which the State Pension Age is equalised for women will be increased from April 2016 so that the female State Pension Age reaches 65 in November 2018, as opposed to April 2020. Full details concerning this will be issued by the DWP in the near future.

The State Pension Age will then increase to 66 for both men and women from December 2018 to April 2020.

Pension contribution tax relief and lifetime allowance

From tax year 2011/12 tax relief on pension contributions will be restricted to an annual allowance of £50k pa. The annual allowance will be "frozen" until at least 2016/ 17. Tax relief will be available at your highest marginal rate of tax. You will be able to "carry forward" unused annual allowance from the previous 3 tax years, including 2008/09, 2009/10, 2010/11 (£50k pa).



The new lifetime allowance (LTA) of £1.5 million will start from tax year 2012/13. Transitional provisions will be introduced for those individuals who:

• Have primary protection
• Have no transitional protection, but have pension benefits currently valued in excess of £1.5 million
• With pensions currently valued at less than £1.5 million, but who feel that the investment growth/benefit revaluation may take their pension value over £1.5 million
• Enhanced and primary protection will be retained, but enhanced protection will no longer be exempt from the AA test.

The rules relating to trivial pension commutation will be de-coupled from the LTA, therefore the existing limit of £18,000 will not be reduced.

Goodbye to Clerical Medical

Clerical Medical and Clerical Medical International investment products for new business will be re-branded to Scottish Widows.

Extending Disclosure of Tax Avoidance Schemes

A package of five measures revising and extending disclosure of Tax Avoidance Schemes (DOTAS) was consulted upon following PBR 2009 and primary legislation was included in Finance Act 2010 (FA 2010). HMRC expect to be able to implement the package on 1 January 2011. However, some of the hallmarks (descriptions of schemes requiring disclosure) consulted upon will be implemented at a later date in 2011-12.

ISA limits 2010/ 11

The new limit is calculated by reference to the RPI figure for the September before the start of the new tax year. The RPI for September 2010 was 4.6% so the 2011-12 limits (suitably rounded) will be an overall ISA subscription limit of £10,680 of which up to £5,340 can be subscribed to a cash ISA.

Tax allowable pension contributions reduced from April 2011

From April 2011 the limits on tax allowable pension contributions will reduce from £255k to £50k. From 2013 the lifetime allowance will reduce from £1.8m to £1.5m. Hopefully, the Treasury will publish the details behind their proposals shortly.

Double taxation Digest

Information from HMRC on double taxation agreements and in particular personal allowances for non-residents,

Transferable nil rate bands

FAQs (and answers) with regard to the transfer of the inheritance tax (I.H.T.) nil rate band.