Post by bracknellboy on Mar 10, 2016 13:54:33 GMT
Appreciate it if an 'expert' can comment on my understanding of the impact of the tranisitional arrangements for pension input periods. I've read some stuff in the papers but didn't 'get it', but having read the hmrc note below I /think/ I get it. That is my interpretation is:
Under the arrangements, the 15/16 year was deemed to have two PIPs, and two allowance periods (making a nominal total of £80k rather than £40k for the 15/16 tax year). Specifically that scheme PIPs open at 8th July were closed at 8th July and a new short year period runs from 9th July - April 5th. This latter has a full £40k allowance, (as indeed did the former, but unless you had taken advantage of it at the time it came into affect, not helpful).
For simplicity, lets say you were putting in full £40k in equal monthly tranches on a scheme with a PIP that would otherwise have been running 6/04-5/04 (for example on a regular salary sacrifice scheme).
By my reckoning - IF I've understood correctly - that would mean that the £10k of allowance used up by 8th July 15 (3 months worth of equally spread £40k) is cleaned from the slate and is available to be used in addition to the £30k you had scheduled under monthly payments for the remainder of the tax year.
Is this correct ?
And if it is correct....my pension contributions in recent times has all been done by salary sacrifice. if a lump sum is put into a pension outside of salary sacrifice and the provider is doing the normal of topping up the nominal basic tax relief, then i believe £10k of allowance equates to an £8k lump sum to actually be placed with the pension provider. Correct ?
www.gov.uk/government/publications/pensions-technical-note-transitional-provisions-for-aligning-pension-input-periods/pensions-technical-note-transitional-provisions-for-aligning-pension-input-periods
Under the arrangements, the 15/16 year was deemed to have two PIPs, and two allowance periods (making a nominal total of £80k rather than £40k for the 15/16 tax year). Specifically that scheme PIPs open at 8th July were closed at 8th July and a new short year period runs from 9th July - April 5th. This latter has a full £40k allowance, (as indeed did the former, but unless you had taken advantage of it at the time it came into affect, not helpful).
For simplicity, lets say you were putting in full £40k in equal monthly tranches on a scheme with a PIP that would otherwise have been running 6/04-5/04 (for example on a regular salary sacrifice scheme).
By my reckoning - IF I've understood correctly - that would mean that the £10k of allowance used up by 8th July 15 (3 months worth of equally spread £40k) is cleaned from the slate and is available to be used in addition to the £30k you had scheduled under monthly payments for the remainder of the tax year.
Is this correct ?
And if it is correct....my pension contributions in recent times has all been done by salary sacrifice. if a lump sum is put into a pension outside of salary sacrifice and the provider is doing the normal of topping up the nominal basic tax relief, then i believe £10k of allowance equates to an £8k lump sum to actually be placed with the pension provider. Correct ?
www.gov.uk/government/publications/pensions-technical-note-transitional-provisions-for-aligning-pension-input-periods/pensions-technical-note-transitional-provisions-for-aligning-pension-input-periods
