Extra SIPP contribution this year after MPAA triggered?

incus432

My OH converted her SIPP to a fixed term annuity a few months ago. She had paid in £12500 (gross) earlier in the tax year.  We understand the annuity limits contributions to £10k pa in future but what about this tax year?  She has extra earnings that would allow another contribution before April.  Am I right that this is allowed?

NoMore

Testing against the MPAA
First year:
The MPAA takes effect from the date it was triggered onwards.
So in the tax year in which the MPAA is triggered there are two separate AA tests.
1. Over the entire tax year has more than the standard annual allowance currently £60,000 (or the tapered allowance for high earners) been paid into pensions? and
2. Was more than the MPAA, currently £10,000, contributed from the date the MPAA was triggered until the end of the tax year?

from: Annual allowance

So according to that as soon as you triggered the AA you are restricted to the 10k from that point forward. So She paid £12500 before MPAA - that's ok, now any further contributions for the tax year must be less than the MPAA and also overall the total for the year must be less than the AA.

Also before somebody suggests, it triggering the MPAA also prevents use of carry forward of unused AA. 

Marcon

NoMore said:

Testing against the MPAA
First year:
The MPAA takes effect from the date it was triggered onwards.
So in the tax year in which the MPAA is triggered there are two separate AA tests.
1. Over the entire tax year has more than the standard annual allowance currently £60,000 (or the tapered allowance for high earners) been paid into pensions? and
2. Was more than the MPAA, currently £10,000, contributed from the date the MPAA was triggered until the end of the tax year?

from: Annual allowance

So according to that as soon as you triggered the AA you are restricted to the 10k from that point forward. So She paid £12500 before MPAA - that's ok, now any further contributions for the tax year must be less than the MPAA and also overall the total for the year must be less than the AA.

Also before somebody suggests, it triggering the MPAA also prevents use of carry forward of unused AA. 

....unless you are an active member of a DB scheme, in which case carry forward is still available as the MPAA only applies to DC schemes.

NoMore

Marcon said:

NoMore said:

Testing against the MPAA
First year:
The MPAA takes effect from the date it was triggered onwards.
So in the tax year in which the MPAA is triggered there are two separate AA tests.
1. Over the entire tax year has more than the standard annual allowance currently £60,000 (or the tapered allowance for high earners) been paid into pensions? and
2. Was more than the MPAA, currently £10,000, contributed from the date the MPAA was triggered until the end of the tax year?

from: Annual allowance

So according to that as soon as you triggered the AA you are restricted to the 10k from that point forward. So She paid £12500 before MPAA - that's ok, now any further contributions for the tax year must be less than the MPAA and also overall the total for the year must be less than the AA.

Also before somebody suggests, it triggering the MPAA also prevents use of carry forward of unused AA. 

....unless you are an active member of a DB scheme, in which case carry forward is still available as the MPAA only applies to DC schemes.

Haha yes forgot to mention DB, bloody pensions never simple is it!

Marcon

NoMore said:

Marcon said:

NoMore said:

Testing against the MPAA
First year:
The MPAA takes effect from the date it was triggered onwards.
So in the tax year in which the MPAA is triggered there are two separate AA tests.
1. Over the entire tax year has more than the standard annual allowance currently £60,000 (or the tapered allowance for high earners) been paid into pensions? and
2. Was more than the MPAA, currently £10,000, contributed from the date the MPAA was triggered until the end of the tax year?

from: Annual allowance

So according to that as soon as you triggered the AA you are restricted to the 10k from that point forward. So She paid £12500 before MPAA - that's ok, now any further contributions for the tax year must be less than the MPAA and also overall the total for the year must be less than the AA.

Also before somebody suggests, it triggering the MPAA also prevents use of carry forward of unused AA. 

....unless you are an active member of a DB scheme, in which case carry forward is still available as the MPAA only applies to DC schemes.

Haha yes forgot to mention DB, bloody pensions never simple is it!

I think that's why a forum like this is so useful. There's always 'something' to add...!!

incus432

NoMore said:

Testing against the MPAA
First year:
The MPAA takes effect from the date it was triggered onwards.
So in the tax year in which the MPAA is triggered there are two separate AA tests.
1. Over the entire tax year has more than the standard annual allowance currently £60,000 (or the tapered allowance for high earners) been paid into pensions? and
2. Was more than the MPAA, currently £10,000, contributed from the date the MPAA was triggered until the end of the tax year?

from: Annual allowance

So according to that as soon as you triggered the AA you are restricted to the 10k from that point forward. So She paid £12500 before MPAA - that's ok, now any further contributions for the tax year must be less than the MPAA and also overall the total for the year must be less than the AA.

Also before somebody suggests, it triggering the MPAA also prevents use of carry forward of unused AA. 

No DB contributions to worry about so the answer looks clear. Many thanks all