Prior Year Pension Tax Relief

[5pen]

I would be grateful if anyone with experience of this would check my understanding and calculations of the maximum net contribution I can make. I paid tax at 40% in each of the years in question.

Assuming I had the cash available, have I understood the potential amount I could add and to my pension given the figures shown?

I understand that I can utilise unused allowance from the tax years from 2015/16 to 2017/18? (assuming I make the contribution before the end of the current tax year). Is this correct?

Figures from my provider;


- * I understand that the allowance for 2015/16 period #2 was 0, but you could carry forward up to 40,000 of unused allowance from period #1.

Finally and most importantly, are the figures in the column 'Net' correct given the allowances and inputs shown?

I'd be grateful for any assistance.

[modeller]

5pen said:

I would be grateful if anyone with experience of this would check my understanding and calculations of the maximum net contribution I can make. I paid tax at 40% in each of the years in question.

Assuming I had the cash available, have I understood the potential amount I could add and to my pension given the figures shown?

I understand that I can utilise unused allowance from the tax years from 2015/16 to 2017/18? (assuming I make the contribution before the end of the current tax year). Is this correct?

Figures from my provider;


- * I understand that the allowance for 2015/16 period #2 was 0, but you could carry forward up to 40,000 of unused allowance from period #1.

Finally and most importantly, are the figures in the column 'Net' correct given the allowances and inputs shown?

I'd be grateful for any assistance.

my understanding is that you can go back 3yrs .. so for 18-19 you've got ~£56k + £40k to play with gross.
Google a pension allowance calculator , hmrc and HL have one.

[EddieSteadyGo]

Your calculation for 2015/16 isn't correct.

The 'pre-alignment period' in the first part of the 2015/16 tax year effectively doesn't get any carry forward allowance.

So you paid in circa £6400 in that period, which is great. But there is no carry forward amount for this period.

You then paid in circa £18,400 for the second part of 15/16. And that part of the year does have the normal £40,000 carry forward allowance.

So overall you have the ability to carry forward circa £21,600 from 2015/16 (at least for the next few weeks, as we are about to tip into the next tax year).

[Welshbeef]

For pension overpayments - without relying on company payroll to make the payment in the March payroll do you pay in directly into your pension provider of choice/company scheme?

[Mr Pointy]

The HL calculator gives a gross amount of £96,398.42 including the allowance for 2018/19.
https://www.hl.co.uk/pensions/contributions/carry-...

I think the calculation is like this:



I'm not sure whether your "Input" numbers are Net or Gross & watch the order of carry forward & any effect on your allowance if your adjusted income is over £150k.

[5pen]

EddieSteadyGo said:

Your calculation for 2015/16 isn't correct.

The 'pre-alignment period' in the first part of the 2015/16 tax year effectively doesn't get any carry forward allowance.

So you paid in circa £6400 in that period, which is great. But there is no carry forward amount for this period.

You then paid in circa £18,400 for the second part of 15/16. And that part of the year does have the normal £40,000 carry forward allowance.

So overall you have the ability to carry forward circa £21,600 from 2015/16 (at least for the next few weeks, as we are about to tip into the next tax year).

Thank you. I can see that now and had misunderstood how the allowances for the 2 input period of 2015/16 worked. To clarify, if I make a net contribution of circa £12,960 this will gross-up to £21,600 and will use the 2015/16 allowance before I lose it when the 2019/2020 tax year commences. Mr Pointy's post about the 'order of use' has concerned me slightly as surely this would indeed mean that I 'lose' the 2015/16 unused allowance?

[5pen]

Welshbeef said:

For pension overpayments - without relying on company payroll to make the payment in the March payroll do you pay in directly into your pension provider of choice/company scheme?

It will be made via the company payroll. It's a good point as though it will be processed in my employer's March payroll and I will need to ensure that it hits the pension before 05/04/2019.

[Mr Pointy]

5pen said:

Thank you. I can see that now and had misunderstood how the allowances for the 2 input period of 2015/16 worked. To clarify, if I make a net contribution of circa £12,960 this will gross-up to £21,600 and will use the 2015/16 allowance before I lose it when the 2019/2020 tax year commences. Mr Pointy's post about the 'order of use' has concerned me slightly as surely this would indeed mean that I 'lose' the 2015/16 unused allowance?

Yes, you have to use all of this year's allowance before you can carry forward from 2015/16. The 'grossing up' doesn't work as you describe either. For 2018/19 you'd make a payment of £32,000 which would be grossed up by 20% by the pension company to £40,000 & then you would get £8000 of further tax relief. This is why I was unsure about your "input" figures as I don't know if they are gross or net of 20% or something else.