188体育

Section 233 Finance Act 2004

Transitional annual allowance rules apply for tax year 2015-16.

For annual allowance purposes only, the 2015-16 tax year is split into two 鈥榤ini鈥� tax years - the 鈥榩re-alignment tax year鈥� and the 鈥榩ost-alignment tax year鈥� (see PTM058010 for more details).

Any pension input amounts for the pre-alignment tax year are tested against the allowances (annual and, if applicable, money purchase annual allowances) for that 鈥榤ini鈥� tax year. Similarly, any input amounts for the post-alignment tax year are tested against the allowances for that 鈥榤ini鈥� tax year. See PTM058020 and PTM058030 for more details.

For other money purchase arrangements, the pension input amount for each 鈥榤ini鈥� tax year will be the total of all relievable member contributions plus all employer contributions paid in respect of the individual in a pension input period ending in the 鈥榤ini鈥� tax year.

The method of calculation is the same as set out in PTM053200 generally, except for the change to the 鈥榤ini鈥� tax years for tax year 2015-16. Also, see PTM058090 for details about the application of the money purchase annual allowance.

Example

Sandip鈥檚 only arrangement is an other money purchase arrangement. Sandip and his employer contribute to the arrangement.

The money purchase annual allowance does not apply at all as Sandip has not flexibly accessed a money purchase arrangement.

A pension input period for the arrangement started on 1 June 2014 and ended on 31 May 2015. The total of Sandip鈥檚 and his employer鈥檚 contributions during this period is 拢24,000.

The next pension input period started on 1 June 2015 and was ended on 8 July 2015 (but for the transitional rules it would have ended on 31 May 2016). The total of Sandip鈥檚 and his employer鈥檚 contributions during this period is 拢4,100.

This means that Sandip鈥檚 total pension input amount for the pre-alignment tax year (6 April 2015 to 8 July 2015) is the aggregate of the pension input amounts for the pension input periods 1 June 2014 to 31 May 2015 and 1 June 2015 to 8 July 2015 = 拢28,100 (拢24,000 + 拢4,100).

Sandip鈥檚 chargeable amount for the pre-alignment tax year is nil because his total pension input amount (拢28,100) is less than the annual allowance of 拢80,000 for that 鈥榤ini鈥� tax year.

Sandip can carry forward to the post-alignment tax year 拢40,000 of unused annual allowance from the pre-alignment tax year. Even though 拢51,900 worth of the 拢80,000 annual allowance for the pre-alignment tax year was not used by Sandip, the maximum annual allowance he can carry forward is 拢40,000.

The next pension input period for Sandip鈥檚 arrangement started on 9 July 2015 and ends on 5 April 2016. The total of Sandip鈥檚 and his employer鈥檚 contributions during this period is 拢18,450.

This means that Sandip鈥檚 total pension input amount for the post-alignment tax year (9 July 2015 to 5 April 2016) is the pension input amount for the pension input period 9 July 2015 to 5 April 2016 = 拢18,450.

Sandip鈥檚 chargeable amount for the post-alignment tax year is also nil because his total pension input amount (拢18,450) is less than the amount of unused annual allowance of 拢40,000 that he carried forward from the pre-alignment tax year to the post-alignment tax year.

(Note 鈥� any available unused annual allowance Sandip might be able to carry forward from 2012-13, 2013-14, 2014-15 to the post-alignment tax year is not material in this particular example as the available unused annual allowance from the pre-alignment tax year - 拢40,000 in this example 鈥� is used in priority to any other available unused annual allowance from earlier tax years.)

For the tax year 2015-16 overall, Sandip does not have an annual allowance charge because the sum total of his chargeable amounts for the pre and post-alignment tax years is nil.