Cap on Unlimited Income Tax Reliefs
12 April 2012
A joint HMRC/HM Treasury Budget update note on the cap on unlimited tax reliefs has been published in advance of the summer consultation.
Currently, individuals can offset their entire income against income tax reliefs, and as a result pay no income tax at all. Budget 2012 announced from 6 April 2013 there will be limits to the amount of income tax relief individuals can claim, including charitable reliefs. However the Government is in discussion with the philanthropy and charitable sectors to ensure this change does not significantly impact those charities dependant on large donations.This cap will apply only to reliefs which are currently unlimited. This cap will be set at 25 per cent of income (or £50,000, whichever is greater).
More information is available from the HMRC website.