Income Tax (Trading and Other Income) Act 2005 section 845F

Effect of claim on relief for contributions to registered pension schemes

Section 845F restricts the pension contribution tax relief available to a qualifying new UK resident who also claims the special foreign income relief under section 845A.

• Where a new resident claims foreign income relief and also claims pension contribution relief exceeding the basic amount, their pension relief is reduced.
• The reduction equals the lesser of the "relevant amount" (the portion of foreign income relief attributable to income that counts as relevant UK earnings) and the amount needed to bring pension relief down to the basic amount.
• The pension relief can never be reduced below the basic amount as defined in Finance Act 2004 section 190(4).
• Only qualifying foreign income that also qualifies as relevant UK earnings for pension purposes triggers this restriction.

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