Although individuals can now get tax relief on pension contributions of up to 100% of their earnings in any tax year, if they exceed their annual allowance they will be liable to 40% tax.

As a result, high earners are effectively capped by this allowance – £215,000 gross in 2006/07, rising by £10,000 per year to £255,000 gross in 2010/11. Future increases will be at the discretion of the Treasury.

This all looks quite straightforward, but closer scrutiny reveals that it is possible to double up on the annual allowance with careful planning....

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