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Gov’t considers £40k annual allowance in raid on wealthy

Gov’t considers £40k annual allowance in raid on wealthy

Chancellor George Osborne is considering a raid on the pension contributions of the wealthy, which may include lowering the maximum annual tax-exempt pension contribution, the annual allowance, to £40,000, according to reports.

The Financial Times reported Osborne was considering options to propose in his Autumn statement, which he must send to the Office for Budget Responsibility by 28 November, and announce on 5 December.

The FT said Osborne (pictured) was looking to target the wealthy after David Cameron vetoed Liberal Democrat-backed plans for a mansion tax, a higher rate of council tax for luxury homes and apartments.

In 2010 Osborne reduced the annual allowance from £255,000 to £50,000.

A threshold of £40,000 is expected to raise around £600 million, while a further cut in the threshold to £30,000 would raise £1.8 billion, according to the FT.

The paper said another option under consideration was to increase stamp duty land tax on property sales.

Osborne is targeting £10 billion in benefit savings by 2015/16.

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