Pension Carry Forward

GlasgowExpat2

Dazed_and_C0nfused said:

GlasgowExpat2 said:

Dazed_and_C0nfused said:

GlasgowExpat2 said:

wjr4 said:

How much is your gross income?

Salary is £30k.  I also have rental income, assume that wouldn’t count?

Where does using unused annual allowance from previous years come into it then?

You have still got £30k of this year's allowance (less any employer contributions) to use before carry forward is relevant.

I’m in the process of selling my BTL so was going to put some of the proceeds into my pension (I’m 60 and looking to retire in 2-3 years)

Having the funds is the easy part.

Being eligible to use carry forward less so.

Have a read of this.

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/carry-forward/

The link says “This website is intended for financial advisers only”

Dazed_and_C0nfused

GlasgowExpat2 said:

Dazed_and_C0nfused said:

GlasgowExpat2 said:

Dazed_and_C0nfused said:

GlasgowExpat2 said:

wjr4 said:

How much is your gross income?

Salary is £30k.  I also have rental income, assume that wouldn’t count?

Where does using unused annual allowance from previous years come into it then?

You have still got £30k of this year's allowance (less any employer contributions) to use before carry forward is relevant.

I’m in the process of selling my BTL so was going to put some of the proceeds into my pension (I’m 60 and looking to retire in 2-3 years)

Having the funds is the easy part.

Being eligible to use carry forward less so.

Have a read of this.

https://adviser.royallondon.com/technical-central/pensions/contributions-and-tax-relief/carry-forward/

The link says “This website is intended for financial advisers only”

You should still be able to read it though.

This is an alternative though, in particular the detailed guide near the bottom of the link.

https://retirement.fidelity.co.uk/grow-and-manage-your-pension/pension-allowances-tax-benefits/carry-forward/

HappyHarry

In a nutshell, with earnings of £30,000 this tax year you can contribute £30,000 gross to pensions and cannot avail yourself of carry forward.

Albermarle

HappyHarry said:

In a nutshell, with earnings of £30,000 this tax year you can contribute £30,000 gross to pensions and cannot avail yourself of carry forward.

As above you do not earn enough to take advantage of any unused allowances from previous year. To be 100% clear the £30K max you can contribute  includes tax relief.

Grumpy_chap

Albermarle said:

HappyHarry said:

In a nutshell, with earnings of £30,000 this tax year you can contribute £30,000 gross to pensions and cannot avail yourself of carry forward.

As above you do not earn enough to take advantage of any unused allowances from previous year. To be 100% clear the £30K max you can contribute  includes tax relief.

The OP must also remember that the £30k includes any employee contributions to a work-place pension, but not any employer contributions.

GlasgowExpat2

Thanks. Frustrating that the scheme only applies to higher rate tax payers. 

My scheme is salary sacrifice so I should only include my 10% contribution. If I make a payment for in December do I just need to calculate my pension contributions to the end of the tax year. 

af1963

If your scheme is salary sacrifice, then all the payments going in are *employer* contributions.  ( Even if you are sacrificing 10% of your salary to do it.)

dunstonh

Thanks. Frustrating that the scheme only applies to higher rate tax payers. 

It doesn't. Some non rate taxpayers and basic rate taxpayers can also use carry forward.   Its not exclusive to higher rate.

Linton

GlasgowExpat2 said:

wjr4 said:

How much is your gross income?

Salary is £30k.  I also have rental income, assume that wouldn’t count?

There are 2 separate limits. The £60k Annual Allowance covers both employer and employee contributions and can be carried forward and the earned income limit for personal contributions which can’t.

Since your earnings of £30k  this year are less than the annual allowance the latter is irrelevant. Your pension contributions this year for which tax relief can be claimed are limited to £30k. 

Albermarle

GlasgowExpat2 said:

Thanks. Frustrating that the scheme only applies to higher rate tax payers. 

My scheme is salary sacrifice so I should only include my 10% contribution. If I make a payment for in December do I just need to calculate my pension contributions to the end of the tax year. 

With SS, your taxable salary is reduced and the employer sends the difference to the pension provider, added to their own contribution. So if you look at your pension, you will see just one employer payment a month.

You can make a gross pension contribution as a lump sum up to the value of your taxable income ( after SS).
So if it was £25K you could add £20K and £5K tax relief would be added by the provider.

One point is to check first with the provider. As they are set up to accept only employer payments in respect of your pension, they might not be able to handle a personal lump sum being added separately. Some certainly can, but not all.