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Carry Forward Calculation:
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The Pension Tax Relief Carry Forward rule allows you to make use of any annual allowance that you may not have used during the previous three tax years, provided you were a member of a pension scheme during those years.
The calculator uses the carry forward formula:
Where:
Explanation: This calculation helps determine the maximum amount you can contribute to your pension while receiving tax relief, including any unused allowances from previous years.
Details: Accurate carry forward calculation is crucial for maximizing pension contributions, optimizing tax relief, and ensuring compliance with HMRC regulations while avoiding annual allowance charges.
Tips: Enter your current annual allowance amount and the total unused allowance from the previous three tax years. All values must be valid (non-negative amounts).
Q1: Who can use the carry forward rule?
A: You must have been a member of a UK registered pension scheme during the tax years you want to carry forward from, and you must use the current year's annual allowance first.
Q2: How far back can I carry forward unused allowance?
A: You can carry forward unused annual allowance from the three previous tax years only.
Q3: What is the current annual allowance?
A: The standard annual allowance is £60,000 (2023/24 tax year), but this may be reduced for high earners or those who have already accessed their pension.
Q4: Are there any restrictions on using carry forward?
A: You must have sufficient relevant UK earnings in the current tax year to support the contributions you want to make, and you must use the current year's allowance first.
Q5: How do I calculate my unused allowance from previous years?
A: Unused allowance is calculated as the difference between the annual allowance for that year and the amount you actually contributed (including employer contributions).