Carry Forward Rules

Lancelot6

Hi,
I am being made redundant this year (20/21 tax year), will receive around £125,000, and will need to use carry forward to put the maximum possible into my defined contribution pension.
I have some carry forward available from 17/18, 18/19, and 19/20, but my questions relate specifically to the amount of carry forward I have available from the 19/20 tax year which appears more complicated than the other years as I paid such a lot in.

In that year, like most people I had an allowance of £40,000, however my earnings were only around £20,000 (according to my P60) due to the fact that I (and my employer) paid £30,000 into my pension using salary sacrifice. (slightly simplified numbers).

Question 1:  Was my relevant earnings £20,000 or £50,000?  In other words did I pay too much into my pension requiring me to use carry forward from an even earlier year i.e. 16/17 tax year?  

Question 2: If I do have to use carry forward from 16/17, then does this mean that I used less of my 19/20 allowance up because some of that years contributions came from the 16/17 rather than the 19/20 allowance?  So is my carry forward from 19/20 going to be £40,000 - 20,000 = £20,000, or is it going to be £40,000 - £30,000 = £10,000?
Thanks for your help.

Lancelot6

jamesd

1. Your earnings were £20,000 and you were able to pay that much in personal contributions and it appears that you paid in nothing. Your employer made £30,000 of employer contributions because that's what salary sacrifice contributions are. Employer contributions aren't counted towards the earnings limit, that 20k. It appears that 30k of annual allowance was used by the combined employee £0 and employer £30k contributions.

2. The whole of the current year 40k of annual allowance is used before any carried forward allowance so 10k of annual allowance was unused by the 30k of total contributions. So 10k to carry forward.