USS tax changes

New laws which restrict the current levels of tax relief on pension savings will be introduced with effect from 6 April 2011. The new allowances, although significantly reduced, should not affect the vast majority of pension scheme members. However, it is important that members understand how the new rules work to ensure they do not accidentally incur a tax charge.

For those that are, further information is now available on the facility for the Scheme to pay any Annual Allowance tax liability (in exchange for a reduction in benefit).  In addition, HMRC have now made information available for individuals who have exceeded the Life Time Allowance charge of £1.5 million who would not have been subject to a charge but for the change in legislation this year.  Individuals may elect to retain the previous, higher Life Time Allowance of £1.8 muillion if they elect to opt out of USS before 5 April 2012.

The documents below detail these changes, when they apply and who may be affected.

• USS Addendum to Limits to Tax Relief and Tax-Free Benefits (PDF - 118KB)
• USS Factsheet on Limits to Tax Relief (PDF - 1287KB)
• HMRC Fixed Protection Application (PDF - 219KB)
• HMRC Fixed Protection Notes (PDF - 67KB)
• Scheme Pays (PDF-128KB)
• USS Pensions Tax Changes (PDF - 221KB)
• USS Pension Input Periods (PDF - 15KB)