From 22 April 2009, GPs with income of £150,000 or more in either 2009/10 or the two previous tax years will be subject to a 'special annual allowance tax charge' if they change their normal regular pension contributions and total contributions exceed £20,000 a year.
The charge will restrict tax relief on the additional pension contributions made on or after 22 April 2009 to the basic rate.
However, normal regular pension contributions made under agreements prior to 22 April 2009 will not be affected. Additional contributions include those paid by the individual, their employer or a third party.
In this context, income includes not just trading profits and salaries but also dividend payments, savings interest, rent, pension income and trust income.
GPs whose profits and/or salaried earnings are less than £150,000, but with other sources of income, may be affected.