Carry Forward Previous Years Tax Allowance

dougzz

I understand I can carry forward unused tax free contribution allowance from three previous years. If I wanted to do this and take advantage of unused allowance from 12-13, 13-14 and 14-15 this year, would I have needed to do anything special previously, do I need to in some way arrange this with the pension provider or HMRC, or is it just an usable option?
Also, when I check my contribution statements (AJ Bell/Sippdeal) they don't properly tally with what I consider my contributions, because the tax reclaim often overlaps into a different year. For the purposes of carry forward must I use the Sippdeal statements, or what I know I've contributed + 25%?
Thank you to anyone that can provide help.

xylophone

https://www.gov.uk/tax-on-your-private-pension/annual-allowance

has link to HMRC calculator and guidance- might help?

chucknorris

dougzz wrote: »

I understand I can carry forward unused tax free contribution allowance from three previous years. If I wanted to do this and take advantage of unused allowance from 12-13, 13-14 and 14-15 this year, would I have needed to do anything special previously, do I need to in some way arrange this with the pension provider or HMRC, or is it just an usable option?
Also, when I check my contribution statements (AJ Bell/Sippdeal) they don't properly tally with what I consider my contributions, because the tax reclaim often overlaps into a different year. For the purposes of carry forward must I use the Sippdeal statements, or what I know I've contributed + 25%?
Thank you to anyone that can provide help.

I believe I am correct in saying that if you have 'correctly' carried forward your pension relief annual allowance, then you do not need to submit anything with your tax return. You only need to submit details of when you actually exceed the annual relief (i.e. when you cannot use the carry forward facility to offset all your contributions).

However I would recommend when you calculate it, carefully keep a copy of your calculations, so if the IR request details then you can provide them. I would make notes at the time of calculation, because it is likely that by the time they ask you (if they do) if you are anything like me, by then you would have forgotten how you calculated it and why you did things the way that you done them.

This is all explained on the following:

1. Your tax return states: If you paid in excess of £40,000 you should consider completing the 'pension tax savings' section of Ai of the 'Additional information pages' (note that it states only 'consider').

2. If you did have to state an excess it would be declared on sa -101

3. The sa - 101 notes direct you to an additional help sheet hs345, which confirms that you have no excess if you (correctly) carry forward previously unused years of allowance, )so no need to submit anything)

JasonPr

dougzz wrote: »

Also, when I check my contribution statements (AJ Bell/Sippdeal) they don't properly tally with what I consider my contributions, because the tax reclaim often overlaps into a different year. For the purposes of carry forward must I use the Sippdeal statements, or what I know I've contributed + 25%?

The latter. Even if tax reclaim is paid into your account in the following year because it takes a few months, it will count for this year.

thenudeone

dougzz wrote: »

I understand I can carry forward unused tax free contribution allowance from three previous years.

No you can't.

see my answer here http://forums.moneysavingexpert.com/showpost.php?p=68651684&postcount=7

jamesd

dougzz wrote: »

I understand I can carry forward unused tax free contribution allowance from three previous years. If I wanted to do this and take advantage of unused allowance from 12-13, 13-14 and 14-15 this year, would I have needed to do anything special previously, do I need to in some way arrange this with the pension provider or HMRC, or is it just an usable option?

Nothing, just use it in your own calculations. HMRC gets the numbers anyway from pension providers and can check without any help from you.

Remember that the limit is the lower of your earned income or the annual allowance and any carried forward annual allowance. Carried forward income isn't allowed, just annual allowance.

Chucknorris mentioned some things that can be handy because HMRC penalties are greatly limited if they get tax wrong based on facts that you have correctly told them.

Thenudeone appears to have read "annual allowance" in your post as "annual income carry forward" and is of course right that that isn't permitted. But assuming you were writing about the annual allowance, it's fine to carry that forward.