Finance Act 2004
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The Finance Act 2004 is a piece of United Kingdom legislation.
One of the main changes introduced by the act was a change in the taxation of UK Pensions from April 6, 2006. Prior to the change many different taxation regimes applied to pension schemes depending on exactly what type of scheme it was. After the changes a single taxation regime was designed.
The principle of the new regime is that a pension fund will be tax-free provided it is below the life time allowance (which was set at £1.5m for the year from April 6, 2006). A second restriction was imposed limiting the maximum annual contribution into a pension scheme.
Whilst the new regime is simpler the need to provide transitional arrangement for pension scheme members whose existing entitlements exceed the new limits has resulted in the actual implementation being extremely complex.
The Act also introduced an income tax regime known as pre-owned asset tax which aims to reduce the use of common methods of inheritance tax avoidance.[1]
[edit] Full title of the Act including pre-amble and enacting formula
An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.
Most Gracious Sovereign
WE Your Majesty's most dutiful and loyal subjects the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses and making an addition to the public revenue have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned and do therefore most humbly beseech Your Majesty that it may be it enacted and be it enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same as follows.
