news.bbc.co.uk/1/hi/business/4618413.stm
Government plans to simplify pension rules will boost the wealth of the richest members of society by £2bn, research group Datamonitor claims.
The rules, due to be introduced in April 2006, will allow people to include buy-to-let investment property in their pension pot.
As a result, many investors will be in line to claim pension tax relief.
Datamonitor said the change would mean that top-bracket 40% income tax payers would get relief totalling £2bn a year.
This is a tax break for the rich funded by all taxpayers
Julian Crooks, Financial Planning Service
The planned pension reforms will affect the whole market, but Datamonitor said that the option to claim tax relief on a buy-to-let property would prove particularly attractive to the rich.
Prohibitive costs
Datamonitor estimated that the vast majority of people taking advantage of the pension shake-up will be earning more than £75,000 a year. [DP - I thought this was poverty wages? ]
The group said this was because the costs of setting up a self-invested personal pension, the necessary pension framework for claiming tax relief on buy-to-let property, were high.
"The government has underestimated the impact that the changes will make," said Oliver Guirdham, author of the Datamonitor report. "This constitutes a £2bn tax relief for Britain's wealthiest customers."
Julian Crooks, an independent financial adviser with the Sheffield-based Financial Planning Service, branded the buy-to-let tax break as a "retrograde step."
"This is a tax break for the rich funded by all taxpayers. The money would be better spent encouraging people on average incomes to save more for their retirement," Mr Crooks said.
Get em in there boys! Luverly Jubberly.
Government plans to simplify pension rules will boost the wealth of the richest members of society by £2bn, research group Datamonitor claims.
The rules, due to be introduced in April 2006, will allow people to include buy-to-let investment property in their pension pot.
As a result, many investors will be in line to claim pension tax relief.
Datamonitor said the change would mean that top-bracket 40% income tax payers would get relief totalling £2bn a year.
This is a tax break for the rich funded by all taxpayers
Julian Crooks, Financial Planning Service
The planned pension reforms will affect the whole market, but Datamonitor said that the option to claim tax relief on a buy-to-let property would prove particularly attractive to the rich.
Prohibitive costs
Datamonitor estimated that the vast majority of people taking advantage of the pension shake-up will be earning more than £75,000 a year. [DP - I thought this was poverty wages? ]
The group said this was because the costs of setting up a self-invested personal pension, the necessary pension framework for claiming tax relief on buy-to-let property, were high.
"The government has underestimated the impact that the changes will make," said Oliver Guirdham, author of the Datamonitor report. "This constitutes a £2bn tax relief for Britain's wealthiest customers."
Julian Crooks, an independent financial adviser with the Sheffield-based Financial Planning Service, branded the buy-to-let tax break as a "retrograde step."
"This is a tax break for the rich funded by all taxpayers. The money would be better spent encouraging people on average incomes to save more for their retirement," Mr Crooks said.
Get em in there boys! Luverly Jubberly.
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