Use Carry Forward for 15/16?

[rosarina]

Can any wise Mumsnetters help me please? Is it possible to use 'carry forward' to pay £ into my pension for the tax year 15/16 when I didn't use the whole allowance?

Or have I got this totally wrong? Read two seemingly contradictory articles...

Yes you can. £40k but you have to use all of this years allowance first (40k or whatever you may have remaining after the taper is applied if you earn over 110/150k)

• do you earn enough to offset all of this as it’s max 100% of earnings?

You can then reach back to the post alignment tax year (crap adjustment in 15/16) and fill that up if you have earnings.

Ok - thank you.

Erm... what do you mean when you say offset...?

This is a one-off but I'm making up for (a lot) of lost time... hence not used to dealing with this.

How far can I go back to do this?

Well if you earn 28k then you can only put 28k in your pension as you won’t get tax back on the rest. That means no CF needed.

If you earn £80k you can put in 80k, 40k current year, 40k off set against the 15/16 allowance.

Thank you Ok

You can also catch up 16/17 & 17/18 at £40k each but earnings are not often high enough for crazy amounts!

Thank you OK. So does it work in reverse? One year I overpaid slightly - can I attribute an overpayment to a year I underpaid to keep things tidy? (& to avoid some tax bill at some point??)

You reach back to infilled years if you put too much in, but you only have the current year and the three previous tax years ‘open’ at any time. If you over filled 13/14, this could go back to 10/11 or 11/12 or 12/13 or any combination until each is full. You fill the furthest as that then disappears with the new tax year. If you didn’t put anything more in until 18/19, then the year 14/15 has gone, with no contributions, but 15/16, 16/17, 17/18 are all available. Does that make sense?

Unfilled, not infilled, bloody auto correct

Wow... so not straightforward! Thank you so much.

It's a bit easier to explain by drawing it out, but certainly we have nice complicated spreadsheets for everyone that this impacts on.

Just don't put more than 100% of your earnings in. No point in catching up if you then end up paying the tax back!

I won't don't worry - not using earnings as such - but it is other money we are taxed on...

No hope of being taxed when we come to draw the £, unless something seriously changes

Erm to clarify then... (sorry!) if I paid £1k too much in 2017/8 do you mean I can reach back to 3 years before THAT- i.e. 14/15 when rather less was paid in... and attribute the £1k to that year.. Or ... have I misunderstood?

You can’t use other money, it has to be earnings. If you mean you earn money, but will actually use another source to fund it, fine, but you have to use earnings in a pension, not taxable income.

Yes to the carryforward situation, it would go in 14/15

Hmmm so can I use work stock options (that I've already been taxed on)...?

Are you employed?

It has to be relevant UK earnings that are offset. Do you currently pay tax on earnings?

Yep - re location - complicated as the stocks are listed on the Nasdaq, and when I cash them they appear as (taxed) income in pounds on monthly payslip... but the money itself is transferred from a US trading account...

It’s irrelevant where you get the actual money from, but you have to earn money in the UK (unless government, forces & family) to put money in a pension. If you get a pay slip and the figure will appear on a P60 after the year end, you can put that much in a pension during that same tax year. Earnings are offset only in the current year.

Right thank you so much for all your knowledge and responses, really appreciate it.

Ok... are you still there please?

1. So as I understand it I overpaid for example £1000 in 17/18 which I then attribute to 14/15, (as I have paid in the maximum for 18/19)...

... can I THEN completely fill up 14/15 (transferring for ex 15/16's contributions or other earnings)?

2. So HMRC top up my pension contribution by 20%, great. As a HRTP how do they pay the extra 20% into my pension? Do HMRC do it or do I manually add the money in from the rebate?? (Because I never have! Ashamed to admit I've never understood this!)

Massive thanks

Ok... are you still there please?

I am

1. So as I understand it I overpaid for example £1000 in 17/18 which I then attribute to 14/15,

yes that’s correct.

(as I have paid in the maximum for 18/19)...

... can I THEN completely fill up 14/15

no 14/15 dropped out of range at the change of tax year. The only years you can carryforward in 18/19 are
15/16
16/17
17/18

(transferring for ex 15/16's contributions or other earnings)?

I’m not sure what you mean here. Contributions are made in a tax year and stay in that tax year. Only unused allowances can be used in other tax years. When you say transfer earnings from other years I’m not sure what you mean either. You earn money in a tax year, it stays in that tax year. You can pay pension money and offset it ONLY in the same tax year, again it’s the allownances that get used.

2. So HMRC top up my pension contribution by 20%, great. As a HRTP how do they pay the extra 20% into my pension? Do HMRC do it or do I manually add the money in from the rebate?? (Because I never have!

HMRC don’t, you do! If you want to get £100 in your pension you must pay in £80 (unless you are salary sacrifice). The 20% tax from HMRC is claimed. You have your £100. You must then fill in a tax return which then claims your tax back from HMRC and you get another £20. You’ve then actually only paid £60, but still got £100 in a pension.
Ashamed to admit I've never understood this!)
You’re not alone
Massive thanks
no worries

@earlynights

HMRC have a calculator

Ok thank you for your detailed answers and billie x