Bridget’s total taxable earnings for the 2019/20 tax-year were £130,000. <> @pK@͗l�f_ e��eH��^�v4�f�mJa�����m�l� ��g �"�3�*���{g۽pعJ��~zJ�$��Ĭ��V��v6�@3IK ܬ㡿�+|AM&')��Ѭo�_F��ba�KL��i7����-�L��,�z��. Therefore, he cannot use any previously unused Annual Allowance from these years to reduce the additional tax he owes. 4 0 obj He has not contributed to any other UK registered pension arrangements during 2019/20. As David has not contributed to any other UK registered pension arrangements his Total Pension Input Amount is the same as his Plan Pension Input Amount - £24,500. As Ahmed has not contributed to any other UK registered pension arrangements his Total Pension Input Amount is the same as his Plan Pension Input Amount - £42,000. As Bridget’s total taxable earnings, or Threshold income, are more than £110,000 for the 2019/20 tax-year she needs to calculate her Adjusted income to work out her Annual Allowance, which will now be less than £40,000. 2 0 obj Bridget now follows the steps outlined here to report the excess to HMRC and to use Scheme Pays to settle the additional tax she owes. For each £2 that your adjusted income exceeds £240,000, your annual allowance threshold is reduced by £1. 1 0 obj As this is greater than her Annual Allowance she now needs to pay additional tax. As she has not contributed to any other UK registered pension arrangements her Total Pension Input Amount is her Plan Pension Input Amount of £55,000 plus the Additional Voluntary Contributions she paid during 2019/20 of £3,000: As her Adjusted income is more than £150,000 her Annual Allowance is then reduced by £1 for every £2 of income over £150,000. As David is £15,000 over the adjusted income limit, his £40,000 annual allowance is reduced to £32,500. Example 3: Rebecca <>>> He has never paid Additional Voluntary Contributions. �?gZ�\V�<7�ݿ^^�?�~y�0c�����ˋ�0���tǮk�n�v�:��`���f��V~��`=�4�2�C+X�PL��6v?�T5�h_7��m6ټ��5�����dsCOk|�f�z�=�|���f���l��g���l�g�k6�l��K��|^��o�I5m6�f+x�n`��Ⱦβ9׳%v *�s��a&�CMnd4�k��2��W-��"!E��uDb��G,�?��̋��Qw���L�"/�///��7����qv��1B�A��Wd=���)����(�s�d%�RҎ8j�[�?�?�!���{�t��gV�[еΥ�4y �B�` {��y^���-;E�G�/O��3U�֕�+�D9쟇o�I{��/�3���"[�$��k����Sc��xl��D!sS�c�ɱ��D�\�e��Ʉ�m�q��Y'g�"�����q��f��sa��Kp�e�+4�%g��:�T�u^�L�+�[~=�|�"�Q�ϓd% �u �τD`[4� �Hb���S{4�A��$��ӶҜZ��OD?��ߗ�|�7BM� Z��d�ܔ�RG���C������C��$a!��=��Kf�eR1�+��p���������lE��7| �i��k&A�������k3��� ��ˈ�Uƅ���gn:-vH�8����b9 n %Sسgp���bi���f��?i!c��ÍmH6@푤����~[Rԅ�(�'����/�����X�비������.��_W�&����[�5 ����h�p���tar@�)��6ZT�vC�u��!��;^�F��G�;`�@`��1CE�V3ն�� Ȁ��E�:�����c�n!fA���# �|DȤ�Cy%�� u)2e:w2�E|���"��h��JĿp�7�ػ1؏k_ׄ�. He has not started receiving any of his other retirement savings, therefore the Money Purchase Annual Allowance does not apply to him. endobj Their total annual allowance charge is over £2,000, and; They have inputs in excess of the standard annual allowance in the scheme; Example: Jeff pays £50,000 into his scheme and this creates an annual allowance excess of £10,000. Whilst she has other UK retirement savings, she has not yet started to receive these. She has also paid £3,000 during 2019/20 as Additional Voluntary Contributions. She has not contributed to any other UK registered pension arrangements during 2019/20. Further information on Annual Allowance including factors that could lead to a breach and worked examples to illustrate several scenarios. As David’s total taxable earnings are less than £110,000 per annum his Annual Allowance will be £40,000. Please note, the examples above make no allowance for any, Gross Annual Salary in 2016/2017 = £120,000, Less Employee Pension Contributions = £13,680 (11.4%), *Below £110,000 so the AA will not be tapered and remains at £40,000, Gross Annual Salary in 2016/2017 = £130,000, Less Employee Pension Contributions = £14,820 (11.4%), Plus taxable income from property = £30,000, Plus pensions saving in the year = £42,449, *Greater than £150,000 so the AA will be tapered, Pension saving of £42,449 less tapered AA, Copyright © 2020, Merseyside Pension Fund.
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