Tapered Annual Allowance

Sailboat against a beautiful sunset

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.

Tanya Dickson

Tax Manager