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Darling considering tax on pension gains

Chancellor Alistair Darling is considering slapping a tax of up to 50 per cent on investment growth within the private pensions of top earners, according to The Daily Express.

The paper claims next week’s pre-Budget report may reveal an annual income tax of up to 50 per cent on the private pensions of those earning more than £150,000. Investment growth in pensions is currently tax-free.

Some are speculating the measure could be extended to all higher rate taxpayers at a later date in a bid to raise more cash.

The Express says extending a 40 per cent income tax rate on investment growth to all higher rate taxpayers could raise an extra £1bn annually for the Treasury.

The Association of British Insurers has cautioned against any further raids on pensions.

Darling caused outrage in the pensions world when he tapered tax relief on pension contributions for people earning more than £150,000 at March’s Budget.

Director of financial regulation and tax Peter Vipond says: “The Government has already made very significant changes tot he pensions tax relief regime. To do so again for the second time within a year would make it hugely difficult for the industry to sell its products.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. What an idiotic idea. If it is introduced then it should be across the board including all public sector employees including final salary schemes where the liability to the tax payer has increased in any given year. That would kill it as an idea….

  2. So presumably there will be a tax rebate for losses. I’ll vote for this – especially if it is backdated!

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