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Posted Wed, 23 Nov 2022 13:13:24 GMT by Thomas Wootton
I am a higher rate taxpayer with defined contribution pension schemes from different employers. I have exceeded my annual allowance for 2021-22 by ~£9k. I have unused annual allowance totaling 27k from the previous 2 tax years. I believe I can carry this forward, however it's not clear to me if I still need to report the excess for tax year 21-22 and if so how I can then also specify I would like to carry forward unused annual allowance to avoid an annual allowance tax charge. Please could you help?
Posted Fri, 25 Nov 2022 10:58:25 GMT by HMRC Admin 32
Hi,

For the tax year 2019-20 onwards individuals can carry forward any annual allowance they have not used in the previous three tax years.

To carry forward unused annual allowance to a current tax year from one or more of the previous three, or previous four, tax years then the individual must have been a member of a registered pension scheme at some point in the previous tax year concerned.  

The unused annual allowance for the previous tax year is the difference between the total pension input amount for that year and the annual allowance for the same year.  

Where an individual has unused annual allowance from a previous tax year that they can use to set off against an annual allowance charge for a current tax year, they do not have to include this on their Self Assessment tax return for the year in which the unused allowance arose or for the year that the unused annual allowance is being used to set off against an annual allowance charge.  

Further guidance on pension allowance carry forward can be found at PTM055000.  

PTM055000 - Annual allowance: carry forward

Thank you.

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