Special rules apply to the pension input amounts ending in the 2015/16 tax year, more information can be found in our article Carry forward in the 2015/16 transitional year.
There are a number of steps that need to be followed to work out the maximum amount that can be carried forward.
The answer is the maximum amount that can be carried forward to the current PIP.
*If the result is negative, the member would either have used carry forward or been liable for the annual allowance charge in that year.
For more information, see:
It's not possible to carry forward unused annual allowance against the MPAA. Money purchase contributions must be limited to £4,000 to avoid a MPAA tax charge.
However, it's possible to carry forward unused annual allowance against the full annual allowance if it still applies to a defined benefit plan, For more information, see An explanation of the money purchase annual allowance (MPAA).
Since 6 April 2016, individuals who have 'adjusted income' for a tax year of greater than £150,000 up to 5 April 2020 and £240,000 from 6 April 2020 have their annual allowance for that tax year restricted.
From 6 April 2020 - Individuals who have taxable income for a tax year of greater than £240,000 will have their annual allowance for that tax year restricted. It will be reduced, so that for every £2 of income they have over £240,000, their annual allowance is reduced by £1. Any resulting reduced annual allowance is rounded down to the nearest whole pound.
The maximum reduction is £36,000, so anyone with income of £312,000 or more will have an annual allowance of £4,000. Individuals with high income caught by the restriction may have to reduce the contributions paid by them and/or their employers or suffer an annual allowance charge.
From 6 April 2016 to 5 April 2020 - Individuals who had taxable income greater than £150,000 had their annual allowance restricted. It was reduced, so that for every £2 of income they had over £150,000, their annual allowance was reduced by £1. The maximum reduction was £30,000, so anyone with income of £210,000 or more had an annual allowance of £10,000.
For more information, see our article Tapering of annual allowance for high incomes - adjusted and threshold incomes and HMRC Pensions Tax Manual - PTM057100: Annual allowance: tapered annual allowance
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.