MPAA Question

shinytop

Apologies if this has been asked before. Say I leave my occupational pension scheme this FY having paid in c. £10k and transfer it all to my SIPP. I then crystallise some funds and take taxable income, still in this FY. Am I penalised for having exceeded the MPPA?

EdSwippet

shinytop wrote: »

Apologies if this has been asked before. Say I leave my occupational pension scheme this FY having paid in c. £10k and transfer it all to my SIPP. I then crystallise some funds and take taxable income, still in this FY. Am I penalised for having exceeded the MPPA?

Do you mean because you paid more than the MPAA into the pension in the year in which you triggered the MPAA? If so, then on my understanding, no. The MPAA operates prospectively, from the day you trigger it. More in this HMRC doc:

https://www.gov.uk/guidance/work-out-your-allowances-if-youve-flexibly-accessed-your-pension#MPAA

Assuming this is a DC pension and not a DB one, that is. Otherwise, outside my understanding.

shinytop

Brilliant Ed, thanks. I also had a play around with some numbers in the HMRC calculator which confirms it's £4k from when you trigger it.