Carry forward allowance and tax relief

flyguy66

I've been trying to get a decent pension pot over the last couple of years. I'm aware I can use any unused allowance over the last three years, to add to my pension pot up to my earnings for the year.

What I have difficulty understanding is whether any additional amount I add over my annual allowance of 40k would attract any tax relief.

Assuming I have earned and paid tax on enough of my salary, would I still be entitled to claim tax relief on any additional amount over 40k?

Thanks in advance

zagfles

Yes, as long as you don't exceed the 100% of earnings limit (note there is no carry forwards for this limit).

Paul_Herring

Assuming I have earned and paid tax on enough of my salary, would I still be entitled to claim tax relief on any additional amount over 40k?

Only to the extent that tax has been paid on it - i.e. if you earned £95K, and contributed £65K to your pension, you'd only get effective 40% relief on the bits that got taxed at 40% (normally around £45K of it) - you'd only get 20% relief on anything over that (£20K to use the example here.)

An exception to this would be anything that would have fallen into the £12.5K tax free allowance - you'd still get 20% relief on that, even though it wasn't taxed at that rate.

flyguy66

Thanks Zagfles, Paul,
that seems quite clear. Just need to figure how much I'm able to carry forward now....