Pension statements and the annual allowance
HM Revenue & Customs have today issued a press release relating to pension statements and the annual allowance.
In the release HMRC say:
The annual allowance for tax relief on pension savings in a registered pension scheme is £50,000 for pension input periods ending in tax years 2011/12, 2012/13 and 2013/14.
You may have received a pension savings statement for 2011/12 and/or 2012/13 informing you that your pension savings in a particular registered pension scheme alone have exceeded the annual allowance for the year. This does not necessarily mean you will have to pay a tax charge.
An annual allowance charge is due where:
- the total of your pension savings across all your registered pension schemes exceeds the annual allowance in any tax year and
- you do not have sufficient unused annual allowance to carry forward from the three previous tax years.
Where an annual allowance charge is due, you need to complete a self assessment return declaring the charge. Further information on carry forward can be found here.
An online tool to help you decide whether you are affected by an annual allowance charge can be found here. Depending on your answers to the questions asked, you may then be advised to go on to use the pension savings annual allowance calculator.
The pension savings annual allowance calculator may help you to calculate the amount of any annual allowance charge due.
If you think you may need to declare an annual allowance charge, but you don't normally submit a self assessment return, you will need to register with HMRC for self assessment. Further information can be found here.
If you want to learn more about the annual allowance, you can visit our web page by clicking here.
If you have any questions about any aspect of pension saving, please contact us using one of the following methods: