Pension contributions over cap - big tax liability coming?

ChumpusRex

kidmugsy wrote: »

That was calculated, was it, using the size of the allowance at the time? It's only recently fallen to £40k.

http://adviser.royallondon.com/technical-central/information-guidance/contributions-and-tax-relief/annual-allowance/

Yes. It was over the allowance at the time.

tigerspill

I received one of these letters as well. It was because I contributed more than the yearly allowance. But I had carried enough from the previous three years so was OK.

kidmugsy

ChumpusRex wrote: »

Yes. It was over the allowance at the time.

But did you look at the huge amount you can carry forward into 2011-12?

ChumpusRex

kidmugsy wrote: »

But did you look at the huge amount you can carry forward into 2011-12?

Ah. Looks like I'm OK then.

Thanks.

zagfles

kidmugsy wrote: »

That was calculated, was it, using the size of the allowance at the time? It's only recently fallen to £40k. For 2011-12 the c/fwd allowance would be huge.

http://adviser.royallondon.com/technical-central/information-guidance/contributions-and-tax-relief/annual-allowance/

You realise you can't carry forwards the full unused allowance from tax years before 2011-12?

The article doesn't really make it clear but you can only carry forwards the amount below £50k, eg if your PIA in 2008/9 was £30k you can only carry £20k forwards to 2011/12 and similarly for 2009/10 and 2010/11.

Otherwise it would be pretty pointless to have reduced the AA for the first few years!