Annual allowance - do we have two of them this year?

zagfles

wary wrote: »

I'm a little confused as to how this works.

Keep it simple and forget carry-forward entitlements; just consider 2015/16 contribution limits.

I contributed £13500 up to 8 July. Is my allowance for 9 July to 5 April £40K (i.e. the clock is simply reset) or £66500 (i.e. an overall limit of £80K regardless)?

£40k.

See https://www.gov.uk/government/publications/pensions-technical-note-transitional-provisions-for-aligning-pension-input-periods/pensions-technical-note-transitional-provisions-for-aligning-pension-input-periods

TheTracker

wary wrote: »

I'm a little confused as to how this works.

Keep it simple and forget carry-forward entitlements; just consider 2015/16 contribution limits.

I contributed £13500 up to 8 July. Is my allowance for 9 July to 5 April £40K (i.e. the clock is simply reset) or £66500 (i.e. an overall limit of £80K regardless)?

Definitely 40k.

However, differences of opinion surround carry forward for 16/17. It's either 80k minus contributions in both PIPs or 40k minus contributions in the latter PIP. Any conclusive guidance?

HappyHarry

However, differences of opinion surround carry forward for 16/17. It's either 80k minus contributions in both PIPs or 40k minus contributions in the latter PIP. Any conclusive guidance?

My understanding is that the amount that can be carried forward from 2015/16 is the lower of:
(i) £80,000 less any contributions made pre 9th July 2015
(ii) £40,000

But ...

Effectively the annual allowance for post July is £0, but you can carry forward up to £40,000 of £80,000 from pre July.

So, if any contributions were made in 2015/16 tax year post 9th July, then those contributions will have used some of the above carry forward.

Example:

If Contributions of £20,000 were made pre July 9th, and contributions of £30,000 were made post July 9th, then:

The first contribution of £20,000 was measured against the £80,000 pre July 9th annual allowance. Clearly, this is within the limits.

No more contributions were made pre July 9th, so a maximum of £40,000 can be carried forward to post 9th July.

£30,000 of the £40,000 carry forward is used post July 9th.

This leaves £10,000 that can be carried forward for the next three years.

The £20,000 unused allowance from the pre July 9th annual allowance has been lost.

wary

A general question about carry forward please (not related to the complexities of determining this year’s allowance …)

I pay contributions direct from my own limited company. If this exceeds the limit for the tax year (ordinarily £40K) but have an unused allowance from a previous year that can be carried forward to cover it, does anything need to be done to make clear that I am using this and haven’t exceeded the threshold … in order to avoid being unduly financially penalised?

For example, does my pension provider need to be made aware? Or do I need to declare something on my PTR (even though these contributions are not normally declared here)?

Thanks