Understanding carry forward

HappyHarry

trampie wrote: »

Oh dear you have no understanding and no clue and Im not the one giving advice, you are BoGoF.

If it helps, trampie, I have a complete understanding of the carry forward rules.

As it appears do BoGof, NoMore, and most definitely zagfles.

As said above, you can not get tax relief on any part of your pension contribution that exceeds your earned income. Regardless of whether or not you use carry forward.

Examples:
Earnings £24k, contribution £20k, tax relief given on £20k.
Earnings £24k, contribution £30k, tax relief given on £24k.
Earnings £24k, contribution £80k, tax relief given on £24k.
Earnings £100k, contribution £80k, tax relief given on £80k provided enough carry forward is available.

You can only benefit from carry forward if you have sufficient earned income in the tax year you make the contribution.

trampie

HappyHarry wrote: »

If it helps, trampie, I have a complete understanding of the carry forward rules.

As it appears do BoGof, NoMore, and most definitely zagfles.

As said above, you can not get tax relief on any part of your pension contribution that exceeds your earned income. Regardless of whether or not you use carry forward.

Examples:
Earnings £24k, contribution £20k, tax relief given on £20k.
Earnings £24k, contribution £30k, tax relief given on £24k.
Earnings £24k, contribution £80k, tax relief given on £24k.
Earnings £100k, contribution £80k, tax relief given on £80k provided enough carry forward is available.

You can only benefit from carry forward if you have sufficient earned income in the tax year you make the contribution.

That does not seem like a complete understanding in the slightest as it does not answer the thread starters questions.

trampie

Paul_Herring wrote: »

I'd stick to reporting the troll, rather than feeding it...

If that is directed at me im not trolling, arent these forums all about money saving tips, advice and on occasion reasoned financial debate.

NoMore

But there is no need for debate in this thread, we have told you the correct factual answer, but you either don't understand it or refuse to accept it.

If you don't understand it, that's fine ask further questions as to what you don't understand and we will endeavour to help, but your flat out refusal to accept the answer isn't helping anyone.

trampie

NoMore wrote: »

But there is no need for debate in this thread, we have told you the correct factual answer, but you either don't understand it or refuse to accept it.

If you don't understand it, that's fine ask further questions as to what you don't understand and we will endeavour to help, but your flat out refusal to accept the answer isn't helping anyone.

This answer you gave earlier you mean :-
''You can only use carry forward when you've used up your full current contribution limit i.e. 40k, therefore you need to be earning at least 40k (in order to contribute that much) before you can use carryforward.

As your partner earns 24k, they cannot take advantage of carryforward.''

I haven't seen evidence as of yet that a person earning under £40k is not allowed to take advantage of the carry forward rule, whereas apparently people earning over £40k [up to a certain limit] have such privileges.

HappyHarry

trampie wrote: »

This answer you gave earlier you mean :-
''You can only use carry forward when you've used up your full current contribution limit i.e. 40k, therefore you need to be earning at least 40k (in order to contribute that much) before you can use carryforward.

As your partner earns 24k, they cannot take advantage of carryforward.''

I haven't seen evidence as of yet that a person earning under £40k is not allowed to take advantage of the carry forward rule, whereas people earning over £40k have such privileges exclusively to themselves.

How can they take advantage of the carry forward rule if they are earning under £40k?

NoMore

Sigh, your really going to make me do this!

From the HMRC TAX MANUAL https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm055100#carryforwardgeneral

The annual allowance for the current tax year is used first.

Meaning you have to use the full annual allowance for the current tax year before you move to using carry forward. The current Annual Allowance is 40k. You need to have earned income of more than 40k in order to use up all your AA for the current year before you can use carryforward.

Paul_Herring

Ok, I see we're going for willfully ignorant now.

https://www.moneyadviceservice.org.uk/en/articles/tax-relief-on-pension-contributions

If you’re a UK taxpayer, in the tax year 2019-20 the standard rule is that you’ll get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower.

Examples follow after that paragraph.

trampie

HappyHarry wrote: »

How can they take advantage of the carry forward rule if they are earning under £40k?

Could they not claim tax relief for 100% of their earnings even if their earnings are less than the cap of £40k ?

HappyHarry

trampie wrote: »

Could they not claim tax relief for 100% of their earnings even if their earnings are less than the cap of £40k ?

Yes.

But that's then not using carry forward, that's just using the standard annual allowance.