Unused allowance carry forward

Christo9her

Hi
Quick question on carry forward of allowances once the new taper for those earning over 150k comes in from April. If ones allowance is just 10k for next year due to earning over 210k, would one still be able to use the full unused allowance carried forward from last three years?
Thanks

jamesd

Carry forward is allowed, see the last paragraph of this document and HMRC's description: "The carry forward of unused annual allowance will continue to be available, but the amount available will be based on the unused tapered annual allowance.".

So the taper reduces the annual allowance but aside from a bit of transitional protection that allowance and the past ones work just as normal.

Christo9her

Thanks for that. Apologies for my slowness, but take the example where one had never previously earned over 150k, but then in tax year 16/17 made over 210k so had an allowance in tax year 16/17 of 10k. How much would one be able to carry over for increased allowance in 16/17? Assume had put in 10k into pension last three years. thanks so much!

jamesd

The past limits were:

2012/13 £50k
2013/14 £40k
2014/15 £40k [STRIKE]See notes[/STRIKE]
2015/16 £40k See notes
2016/17 £40k but for you tapered down to £10k.

You only get the allowance for the year if you were in any pension scheme that year, whether you paid in money or not.

So you could use at least the three 40ks minus the three £10ks paid in plus the tapered £10k for 2016/17. So at least £100k. But see the next paragraph.

Part way through 2015/16 there was a change to the way the allowance was calculated so it is necessary to know the amount in 2015/16 that was paid in during the time from 6 April 2015 to 8 July 2015. A person gets two 40k allowances, one for the time from 6 April to 8 July and another one for the rest of the year.

You can use two annual allowance calculators and there are more out there: HMRC, HL.

LXdaddy

jamesd wrote: »

The past limits were:

2012/13 £50k
2013/14 £40k
2014/15 £40k [strike]See notes[/strike]
2015/16 £40k See notes
2016/17 £40k but for you tapered down to £10k.

As per the notes paragraph the odd year is 2015/16

Christo9her

Thanks all.


Its no wonder people don't both with pensions, when they make it this complicated! Really struggling here to work out what my allowance is this year and what it will be in 2016/17. It is the split 2015/16 year which is making it hard.


Those calculators don't seem to help work this out, mainly due to the split 2015/16 year.

Does everyone get the 80k allowance this year, and does the unused portion of the 80k carry over to 16/17?


Is there no calculator out there that captures the split 15/16 year?

sandsy

Christo9her wrote: »

Does everyone get the 80k allowance this year, and does the unused portion of the 80k carry over to 16/17?

My understanding is that the only people who get £80k are those who'd already invested £40k prior to 9 July.

For everyone else, the annual allowance is effectively whatever you invested prior to 9 July plus £40k.

The maximum that can be carried forward from the 2015/16 tax year as a whole is £40k.