A number of clauses were ditched from the Finance Act 2017 because of the time constraints imposed by the snap general election in June.
Among them were:
- The extension from £150 to £500 of the limit to the income tax exemption for employer-arranged pensions advice.
- The reduction of the Money Purchase Annual Allowance (MPAA) from £10,000 to £4,000.
These were reinstated in the Finance Bill 2017/19, which received royal assent on 16 November 2017 and so has passed into law. An important point is that they’ve been introduced with effect from 6 April 2017.
So for those who triggered the MPAA before 6 April 2017, all contributions paid from 6 April 2017 will count towards the reduced MPAA of £4,000 — bad news for those who took a gamble on the reduction not going ahead, or going ahead from 6 April 2018.
For those who triggered the MPAA after 6 April 2017, the new limit will apply to contributions paid after the date the MPAA was applied.
Visit technical central for more information on the new MPAA and what triggers it.