From April 2011, the availability of higher-rate relief on contributions to registered pension schemes will be restricted for those earning more than £150,000 a year. Tapering will operate so that for those earning above £180,000 a year, relief will be available only at the basic rate. A full consultation on these provisions will be announced in due course.

Anti-forestalling measures to be enacted in the Finance Bill 2009 have been published in draft. These are designed to prevent individuals likely to be affected by the change making pension contributions outside their regular pattern in the run-up to April 2011. The anti-forestalling measures will in turn be subject to anti-avoidance provisions.

The core of the anti-forestalling measures will be the introduction of a "special annual allowance", which will apply in the 2009/10 and 2010/11 tax years in addition to the standard annual allowance. The special annual allowance will apply to an individual who:

For 2009/10, the special annual allowance charge will be levied at 20% of the amount by which total contributions taken into account exceed the special annual allowance. In other words, the effect of the charge will be to restrict the available tax relief to the basic rate.

In assessing liability for the special annual allowance charge, an individual's "total pension input amounts" (as used for testing against the standard annual allowance) will be adjusted by deducting "protected pension input amounts". There will be two types of protected deduction: normal ongoing pension saving and contributions to new (or reactivated) schemes set up on or after 22 April 2009.

The draft legislation contains detailed provisions relating to what counts as normal ongoing pension saving. Broadly, for defined benefit schemes, further accrual will be protected provided there has been no material change to the way that benefits are calculated under the arrangement on or after 22 April 2009. Material changes could include changes in the calculation of pensionable salary or an increase in the accrual rate.

For money purchase schemes, contributions are protected provided that on or after 22 April 2009, the rate at which contributions are being paid under the arrangement does not increase otherwise than in accordance with an increase expressly agreed before 22 April 2009, and provided that the contributions were paid at least quarterly. Note that individuals whose regular savings exceed £20,000 for 2009/10 or 2010/11 will only be liable for the special annual allowance charge on the amount by which their contributions exceed their regular savings. So an individual with a pattern of contributions in excess of this sum can continue to make them without incurring the charge, and attract higher-rate relief until April 2011.

As the new measures have immediate effect, special provisions will allow an individual who has inadvertently become liable for the special annual allowance charge to take a "contributions refund lump sum" if scheme rules allow this. Contributions made to schemes between 6 April and 22 April 2009 will not be liable for the special annual allowance charge, but will reduce the amount of the allowance available for the 2009/10 year.

HMRC says that if an individual were to become liable for the special annual allowance charge in addition to the standard annual allowance charge, the special charge would be reduced to prevent double charging. A test against the special annual allowance will be made in the year in which a member retires, even though this does not trigger a test against the standard annual allowance.

Anti-avoidance measures contained in the draft legislation will provide that protection from the special allowance charge will be lost if an individual participates in a scheme or arrangement which has as its main purpose (or one of its main purposes) the avoidance of liability to the special annual allowance charge, the current annual allowance charge or the lifetime allowance charge by reducing either the total adjusted pension input amount or the protected pension input amount.

Likewise, HMRC seems keen that salary sacrifice should not be used to circumvent the new restriction: for individuals in these arrangements, an amount equal to the employer's pension contribution corresponding to the salary sacrifice will count as "relevant income". Indeed, in the case of any "scheme" which has as its main purpose (or one of its main purposes) to secure that an individual's income is less than £150,000, his or her income is deemed to be £150,000 in any event.

In addition to technical guidance and draft legislation, HMRC has also published guidance for the pensions industry and for individuals.

See 2009 Budget - BN47 - Pensions: limiting Tax Relief for High Income Individuals (Anti-Forestalling).

Provisions in the Finance Bill 2009 will ensure that compensation payable by two public bodies will be treated on the same footing as payments by registered pension schemes:

See 2009 Budget - BN48 - Taxation of payments from the Financial Assistance Scheme.

See 2009 Budget - BN49 - Avoiding unintended tax consequences in relation to pension savings.

As announced in the 2008 Pre-Budget Report, the Finance Bill 2009 will provide relief from stamp duty and SDRT charges that would arise if a stock-lending arrangement terminates and the stock is not returned to the originator under the terms of the arrangement owing to the insolvency of one of the parties.

A parallel relief will apply for the purposes of the tax on chargeable gains to avoid the charge which would otherwise arise under sections 263A and 263B of the Taxation of Chargeable Gains Act 1992. The changes will apply where the insolvency of the borrower or lender occurs on or after 1 September 2008.

See 2009 Budget - BN18 - Stock lending and repurchase arrangements: stamp duty, stamp duty reserve tax and tax on chargeable gains.