CIOT: Pension tax reliefs get green light

Revised plans for pension tax reliefs have been welcomed by the Chartered Institute of Taxation (CIOT).

The body has said that the new strategy is an improvement on the blueprint devised by the Labour government before it lost power, suggesting that the original idea had been too bureaucratic.

However, the CIOT has raised what it considers to be outstanding issues regarding the workability of the scheme, in response to the government's discussion paper entitled 'Restriction of Pensions Tax Relief: a discussion document on the alternative approach'.

It stated that the method of valuing accruals from defined benefit (DB) pension schemes must be a more practical one, and noted that the issue of hybrid systems split between DB and defined contributions was not addressed.

CIOT also said that a separate review is needed to cover issues regarding overseas schemes.

Earlier this week, the National Association of Pension Funds welcomed government moves to target pensions tax relief more towards lower earners.