News: May 2012
Cap on unlimited income tax reliefs due from 6 April 2013
We mentioned this last time as well, and again more details of the plans have been made known.
Currently you can, in theory, offset your entire income against income tax reliefs, and as a result pay no income tax at all. As unlikely a scenario as that is for most of us, we will have to plan by reference to limits to the amount of income tax relief individuals can claim.
This cap will apply only to reliefs which are currently unlimited and will be the greater of 25% of income or £50,000. The principal reliefs affected are loss reliefs that can be claimed against total income, qualifying loan interest relief and reliefs for charitable giving. There will also be a number of smaller reliefs which are currently uncapped that will be affected.
If you think you might be affected, please contact us for some preliminary advice so that you can consider possible acceleration of tax deductibles before the new rules comes in.