If pension savings are more than the annual allowance, unused annual allowances from previous years can be brought forward. The annual allowance is the limit on the amount of pension savings that can be made to all pension schemes in a tax year before tax has to be paid on them.
Pension savings over the annual allowance will not be taxed if there is enough unused annual allowance from previous years to carry forward. Unused allowances from the 3 previous tax years can be carried forward.
HMRC have published a new guide here which includes information on:
- when unused annual allowances cannot be carried forward;
- how to check if the amount of unused annual allowance;
- how to carry forward unused annual allowances and
- what happens if there is no unused annual allowances.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.