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Complex relief

21 July 2005 / Penny Bates
Issue: 4017 / Categories: Comment & Analysis , Investments

PENNY BATES illustrates why the interaction of retirement annuity and personal pension reliefs is anything but simple.

LONSDALE V BRAISBY was recently heard in the Court of Appeal following decisions from the High Court ([2004] STC 1606) and the General Commissioners. The points at issue were the amount of unused relief relating to retirement annuity plans and how the sum of unused relief is calculated and reduced under the transitional provisions of TA 1988, s 655(1).

PENNY BATES illustrates why the interaction of retirement annuity and personal pension reliefs is anything but simple.

LONSDALE V BRAISBY was recently heard in the Court of Appeal following decisions from the High Court ([2004] STC 1606) and the General Commissioners. The points at issue were the amount of unused relief relating to retirement annuity plans and how the sum of unused relief is calculated and reduced under the transitional provisions of TA 1988 s 655(1).

Until 30 June 1988 individuals contributing to retirement savings schemes obtained relief under old style retirement annuity plans. From 1 July these schemes were replaced by personal pension contracts. A couple of issues had to be addressed:

  • It would have been unfair if those continuing to contribute to the old retirement annuities did not continue to qualify for relief.
  • Many taxpayers contributed to both the old style retirement annuities...

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