Annual allowance 2015 16

robin61

Hi Guys,

I think I am clutching at straws here but would appreciate it if I could check my understanding here.

There were some transitional arrangements in place in 2015/16 to allow people to benefit from a double annual allowance of £40K x 2 = £80K. I think the year was split in two

6 April 2015 to 8 July 2015 and
9 July 2015 to 5 April 2016

I am assuming the arrangements were only for 15/16 ?

So for example someone who used £30K in 15/16 will have £10K to carry forward and not £50K.

Is this correct please.

Thanks

gadgetmind

Here is what was done.

http://www.pruadviser.co.uk/content/knowledge/technical-centre/consultations-budget-autumn-statement/summer-budget-2015/transitional-provisions/

Does that answer your question?

david78

If you paid contributions between 6 April 2015 and 8 July 2015 the amount paid is added to the standard allowance to get your allowance for 2015/2016.

So if you paid in (say) £5,000 before 8 July 2015, your allowance for 2015/2016 was effectively £45,000. If you later paid in (say) £6,000 you would have an unused allowance of £34,000 which can be "carried forward" in the following three years.

robin61

I think I have just about understood that. Thanks guys.

So are you saying that the extra £5k allowance in David' s example does not carry forward to future tax years in effect it only carried forward to the second mini year and if not used is effectively lost ?

Shedman

robin61 wrote: »

I think I have just about understood that. Thanks guys.

So are you saying that the extra £5k allowance in David' s example does not carry forward to future tax years in effect it only carried forward to the second mini year and if not used is effectively lost ?

Per my understanding there was an £80k annual allowance for 2015/16 of which only £40k could be carried forward after 8 July, so if you hadn't contributed anything up to 8 July then from 9th July 15 to 5 April 16 the maximum you could contribute was £40k (clearly if you had contributed more than £40k (say £45k) up to 8 July then the £40k carry forward for the second mini-period would be reduced accordingly and would be only be £35k ie £80k - £45k pre 8 July contribution).

Although, in addition, any carry forward from previous tax years can be added to that second mini-period allowance.

robin61

OK thanks guys. I thought I might be onto a loophole but obviously not. I could have done with a bit more carried forward. Never mind.