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Posted Wed, 22 Nov 2023 21:49:39 GMT by
Hi if an employee receives a termination payment of say £50k then £30k is tax free. It’s possible the termination payment could take them over the £260k adjusted income limit. My question is this; would the £30k tax free portion of the termination payment be classed as income in the calculation of adjusted income for the purpose of tapered annual pension allowance.
Posted Thu, 23 Nov 2023 20:29:52 GMT by
I think this is quite a straightforward question, anyone have a definitive answer? It’s a bit urgent due to termination timelines
Posted Fri, 24 Nov 2023 09:30:51 GMT by HMRC Admin 25
Hi RCHMRCForum,
Please refer to:
Work out your reduced (tapered) annual allowance.
If this doesn't help, you will need to contact a fiancial adviser.
Thank you. 
 
Posted Fri, 24 Nov 2023 17:16:38 GMT by HMRC Admin 10 Response
Hi
Per the guidance at Work out your reduced (tapered) annual allowance, your net income starts with your taxable income.
As termination payments qualify for the first £30,000 tax free, only amounts above this would be included .

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