Finance Bill — Clause 5 — Power to Repeal High Income Excess Relief Charge — 15 Jul 2010 at 16:15

The majority of MPs voted to give ministers the power to repeal the high income excess relief charge under secondary legislation (ie. without prior approval of, or full scrutiny by, Parliament).

The high income excess relief charge is an additional tax on pension savings for those with a gross income of more than £150,000 in a year. It is provided for in Section 23 of the Finance Act 2010 which refers to the detailed rates and thresholds etc. within Schedule 2 of the act.

During the debate Justine Greening, the Economic Secretary to the Treasury said the government had plans to restrict pensions tax relief and once the detail of that is finalised the high income excess relief charge provisions would be repealed.^[1]

The HMRC currently state^[2]:

• the Government announced^[3] it is considering restricting pensions tax relief from 6 April 2011 by reforming the existing pension tax allowances, principally through a significantly reduced annual allowance. If the new approach is confirmed, the High Income Excess Relief Charge legislation will be repealed by 31 December 2010.

The vote was on the question of if Clause 5 (Power to repeal high income excess relief charge)^[4] should remain part of the Finance Bill; the majority of MPs voted in favour of it staying in the Bill.

• [1] Justine Greening, House of Commons, 15th July 2010
• [2] Pensions: High Income Excess Relief Charge - draft technical guidance - HMRC
• [3] Restricting Pensions Tax Relief - HM Treasury Statement.
• [4] Clause 5 of the Finance Bill 2010

Debate in Parliament | Source |