The Government is consulting on changing the tax rules in respect of employer asset-backed contributions to defined benefit registered pension schemes. The consultation is open for comment until 16 August 2011.

As announced in Budget 2011, the proposed changes will limit the unintended tax relief that can arise from the ways some contributions are structured. The aim is to ensure that the amount of tax relief given to employers accurately reflects the value of the contributions received by pension schemes, while preserving flexibility for both employers and pension schemes to use these arrangements to manage pension deficits.

The Government has identified two broad options for changing the tax rules in line with its core principles and objectives, and is seeking views on these options to inform the detailed policy design.

The consultation document can be accessed at http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&propertyType=document&columns=1&id=HMCE_PROD1_031296