I got a bonus from work and nominated it to be paid in to my pension account.
I had calculated contributions through out the year to use my higher rate tax band earnings as pension contributions with the bonus added to keep me well under the £40k maximum allowance.
The bonus was much more than expected and has put me over the £40k annual allowance. Not by a huge amount.
What are the tax implications please?
Also, last years contributions are well under £40k. Can I transfer some of the excess to last year's pension savings to mitigate the tax implications and how does one do this?
Thanks.
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From www.hl.co.uk/pensions/contributions
"Your pension contributions are limited by the pension annual allowance which is £40,000 each tax year for most people. Any contributions made by you and your employer count towards it, as does any money the government pays in pension tax relief."
"Your pension contributions are limited by the pension annual allowance which is £40,000 each tax year for most people. Any contributions made by you and your employer count towards it, as does any money the government pays in pension tax relief."
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Ahhh I pasted the same para twice earlier LOL
The second one should have read (from www.hl.co.uk/pensions/contributions/carry-forward-rule )
Generally the most you can pay into your pension each tax year is as much as you earn, up to £40,000.
If you want to make the most of your pension savings and tax allowances, carry forward lets you take advantage of any unused pension allowance from the previous three tax years.
Including the current tax year, that could mean you’re able to make a pension contribution of up to £160,000 including tax relief
Last edited by: VxFan on Tue 15 Mar 22 at 20:25
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Can carry forward previous 3 years' underspend.
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Pension Dilemma - In a Good Way - I Think - smokie
