Case Studies

Maximise pension contributions, but previously exceeded Annual Allowance

Clients can maximise their pension contributions by using Carry Forward of any unused Annual Allowances in previous 3 years – but care is required if exceeded AA in any of those earlier years

  • Kerry Forward is a company director and a member of the company pension scheme
  • It is expected her income will be £100,000 in 2022/23 – as it was in 2016/17 to 2021/22.
  • This is below the ‘threshold’ income limit (£240k in 2022/23, 2021/22 & 2020/21 & £110,000 for 2016/17 to 2019/20), so her Annual Allowance is not tapered & she has £40,000 available for those years.
  • The pattern of contributions to Pension Input Periods ending in the previous 3 tax years was;

 

Year Total Paid Unused/(Excess)
          2021/22 £18,000 £22,000
          2020/21 £98,000 (£58,000)
          2019/20 £14,000 £26,000

 

Having exceeded the Annual Allowance in 2020/21

How much can Kerry pay this tax year?

Solution; Carry Forward calculator

 

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