His contribution history is as follows: In 2016/17, Colin decides to use carry forward to maximise his pension contributions. 6 In Part 4 of FA 2004, after section 228B insert— “228C Annual allowance for, and carry-forward from, 2015-16 (1) The provisions relating to the annual allowance charge (whether provisions contained in or made under this or any other Act) have effect subject to the following rules. However, this problem can become more prominent as carry forward is factored in. Limit on carry-forward of unused allowances from earlier part of 2015-16, (6) Where the current tax year for the purposes of section 228A (carry-forward of annual allowance) is the post-alignment tax year—, (i) the chargeable amount in the individual’s case for the pre-alignment tax year is the default chargeable amount, and. As Covid-19 continues to disrupt the job market, Bob Champion looks at the employment prospects of the over 50s and asks if their housing wealth could or should form part of their retirement plans... Write CSS OR LESS and hit save. Ella’s salary is £130,000 per year. The tapered allowance is calculated by reducing the standard allowance (£40,000) by £1 for every £2 of adjusted income in excess of £150,000. In this scenario, Colin is lowering his personal contribution and asking his employer to pay more instead. (9) For the pre-alignment tax year, section 229(3) applies as if the reference to the end of the tax year were a reference to the end of the post-alignment tax year.”, Part 2 Annual allowance for, and carry-forward from, 2015-16 [F(No 2)A 2015 Sch 4 p 2]. (ii) the excess mentioned in section 228A(5)(a) would otherwise be more than £30,000, Further provisions about carry-forward of unused allowances, (7) Where the current tax year for the purposes of section 228A is the post-alignment tax year or the tax year 2016-17, 2017-18 or 2018-19, section 228A applies in relation to that current tax year as if in section 228A(3)(b)—, (a) for “either or both of the two” there were substituted “any one or more of the three”, and. %����
(a) the amount specified in section 228(1) is treated as being nil. up £30,000 of Linda’s unused annual allowance carry forward entitlement - all of the carry forward available from 2015/16, and £20,000 of the carry forward available from 2017/18. She has £10,000 of adjusted income above £150,000, so her allowance is reduced by £5,000. A person is subject to the tapered allowance if their ‘threshold income’ is above £110,000 and their ‘adjusted income’ is above £150,000. Each year, he contributes £25,000 gross to his personal pension, which operates relief at source.