In April 2016, the tapered annual allowance for pensions was introduced for those with threshold income of £110,000 or more AND adjusted income of £150,000 or more.
For those caught, the annual allowance was tapered from £40,000 down to a minimum of £10,000.
In the recent Budget, the limits used in calculating whether a tapered annual allowance applies were increased but the minimum tapered annual allowance was reduced. In summary:-
· Threshold income limit is increased from £110,000 to £200,000
· Adjusted income limit is increased from £150,000 to £240,000
· The minimum tapered annual allowance decreases from £10,000 to £4,000
· Effective from 6th April 2020 (2020/21 tax year)
If you wish to discuss anything further then please give Hamlyns a call.