Annual allowance, who’s afraid of the big bad tax charge?

Published  12 January 2021
   60 min CPD

Join Fiona and Justin as they dig deeper into some of the technical aspects of the annual allowance (AA), including how it interacts with tax relief, carry forward, the taper and the MPAA.

You’ll also hear about the options for paying any annual allowance tax charge and how staying in a scheme and paying the charge is considered, versus opting out of the scheme.

*The Spring Budget in March 2023 made changes which are not covered in this presentation.  From 6 April 2023, the standard annual allowance increased from £40,000 to £60,000 and the taper will apply if both adjusted income is greater than £260,000 and threshold income greater than £200,000.  The minimum annual allowance for someone affected by the taper is now £10,000.

CPD learning outcomes - 60 minutes

  • How the annual, money purchase, and tapered allowances work
  • How to calculate whether an opt-out is suitable
  • How scheme pays operates
  • Other factors impacting suitability.

What's covered

  • A refresher of the annual, money purchase and taper allowance
  • Scheme pays in detail
  • The calculation process
  • Case studies and planning points.

CPD certificate of completion

Once you've watched the webinar, simply complete the short quiz below and give us a few details in order to receive a CPD certificate of completion.

Check your knowledge

To gain your CPD certificate answer the following questions.

1. What's the annual allowance for somebody who has taxable income of £160,000, who has not triggered the money purchase annual allowance and this is their first pension plan?
2. When describing the money purchase annual allowance which statement is correct?
3. What's the maximum amount somebody can pay in the 2019/20 tax year without having to pay an annual allowance charge if their contributions in the previous pension input periods were: 2018/19 - £15,000; 2017/18 - £20,000; 2016/17 - £40,000
4. A client has exceeded their annual allowance in their scheme and ask the scheme to pay the tax charge. Does the member have to tell HMRC?
5. If the client earns £20,000 what is the maximum individual pension contribution they can pay and receive tax relief?

CPD certificate details

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