Pensions Flashcards
1
Q
General rules
A
Employer contributions: Exempt, deductible for employer, not limited but will use up annual allowance.
Max tax relief on individual contributions are higher of - £3,600 and Relevant earnings.
2
Q
Annual allowance
A
£40k per year plus and unused AA from prior 3 years (as long as the person was a member of a scheme in those years) done on a FIFO basis.
3
Q
Tapering annual allowance
A
If ANI >£240K reduce AA by £1 for every £2. Minimum =£4,000
ANI = net income + employee contributions to occupational schemes + employer contributions to pension schemes
If gross contributions are above AA the excess is taxed at marginal rate as AA charge
