Carry Forward

EdSwippet · 20 June 2017 at 12:36PM

Spreadsheetman wrote: »

... and pay a few £k extra tax, so it can be more complicated than just the pension co fixing it in the background if it goes beyond 1 year. ... It is quite routine though - no one gets very excited about it.

It is nevertheless best avoided. Remember that even though you pay a tax charge on the over-contribution, when time comes to withdraw the balance from the pension it will be taxable a second time.

If your tax liability exceeds £2k you could use 'scheme pays' to extract the tax charge from the pension. In that case you can still end up with a worse outcome than had you not made the over-contribution, but not as bad as the double-tax case otherwise.

honestash62 · 21 June 2017 at 3:15AM

if you have a pension plan for eg say 10 yrs
then you can carry forward from the last 10 yrs ??

yes you can only go back 3 yrs to see what you did not use and add to this years BUT
If you have only put a token £1000 in a pension for the last ten yrs surely you have loads to carry over
in 2010 you would be carrying over from the previous 3 yrs and do the same the next up to now you would build up a large amount ? the figure of 40 k allowance was much higher in the last 10 yrs

yes or no

bigadaj · 21 June 2017 at 6:28AM

honestash62 wrote: »

if you have a pension plan for eg say 10 yrs
then you can carry forward from the last 10 yrs ??

yes you can only go back 3 yrs to see what you did not use and add to this years BUT
If you have only put a token £1000 in a pension for the last ten yrs surely you have loads to carry over
in 2010 you would be carrying over from the previous 3 yrs and do the same the next up to now you would build up a large amount ? the figure of 40 k allowance was much higher in the last 10 yrs

yes or no

No, three years is the limit.

AnotherJoe · 21 June 2017 at 9:54AM

honestash62 wrote: »

if you have a pension plan for eg say 10 yrs
then you can carry forward from the last 10 yrs ??

yes you can only go back 3 yrs to see what you did not use and add to this years BUT
If you have only put a token £1000 in a pension for the last ten yrs surely you have loads to carry over
in 2010 you would be carrying over from the previous 3 yrs and do the same the next up to now you would build up a large amount ? the figure of 40 k allowance was much higher in the last 10 yrs

yes or no

No because your allowance over the last 3 years doesn't increase by adding in what you could have paid in previous years to those. It's locked at £40k max for each year. You can't say (for example) ah I have £40k from 2013 plus £39k from 2012 making £79k. You are locked at £40k.

Carry Forward

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