Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers' forum : Toodle PIP

23 January 2018
Issue: 4632 / Categories: Forum & Feedback

Calculating unused allowance on alignment of pension input periods.

When the pensions annual allowance taper for those earning more than £150 000 was introduced in 2015-16 pension input periods (PIPs) were aligned with the tax year. Transitional rules protected someone who as a result of the realignment of PIPs would otherwise have been treated as paying above the annual allowance in 2015-16. It is necessary to divide that year into two ‘mini-tax years’ as described at here.

The HMRC guidance includes numerical examples for those who paid large premiums in that year but only an unclear narrative explanation of the calculation of unused allowance to carry forward from 2015-16. My client paid £7 345 up to 8 July 2015 and £22 035 after that date.

Can anyone explain how to calculate his unused allowance carried forward? My reading is that it is simply £10 620 (£40 000 minus £29 380) but an IFA assures...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon