Tapering of annual allowance - Rex

This image shows the position for Rex.

Rex is self-employed with income of £240,000 this tax year.

He also has dividends from investments of £10,000. So, his total taxable earnings are £250,000.

To calculate his threshold income, take his taxable income of £250,000 and deduct a pension contribution of £195,000 he made to his personal pension plan.

Rex's threshold income is £250,000 minus £55,000 which equals £195,000. As this is below £200,000 taper does not apply.

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.