Treasury mulls allowing annual allowance charges to be met from pension benefits

The consultation paper - published today - proposes allowing individuals that exceed the annual allowance to pay the tax charge from their pension savings rather than their salary. The Treasury said it is especially likely for high earners and long servers in final salary defined benefit schemes with generous accrual rates to exceed the annual allowance of £50,000, for example following a large salary increase, despite the carry-forward of unused allowances from the previous three years. It said: "In some instances, where there is a significant uplift to the pension in a given year --...