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With effect from 10 October 2007, HMRC are reinforcing the current rule
that abnormally large employer pension contributions should be spread for
tax deduction purposes up to four years. Under the new, post 2006 rules this
is required where, for instance, a multi-million pound contribution exceeds
210% of the previous year’s amount. However, if the previous year’s amount
is nil spreading is not required.
Our view
It appears that some groups have exploited this anomaly to avoid
spreading by routing contributions through a newly-established
participating employer with no previous record of paying contributions.
This will no longer be effective. |
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