Pensions annual allowance tax calculator
03 October 2016
3 October 2016
HMRC has introduced a new online calculator for individuals to work out how much annual allowance they will get for 2016 to 2017 and later tax years.
For the 2016 to 2017 tax year (and onwards), if an individual’s ‘adjusted income’ is over £150,000 their annual allowance in the same year will be reduced.
It won’t be reduced if the individual’s ‘threshold income’ for that year is £110,000 or less - no matter what their adjusted income is.
For every £2 of adjusted income that goes over £150,000, the annual allowance for that year drops by £1. The drop is limited so that the minimum tapered annual allowance someone can have is £10,000.
- have to pay tax because thier pension savings for the tax year go above the annual allowance
- have any unused annual allowances to carry forward.