As well as being able to pay a pension contribution of up to £50,000 this tax year it is also possible to apply unused contributions from previous years so that a contribution can be made of up to £200,000 before 5 April 2012.
For clarity, pension contributions paid in the 2011/12 tax year have a new maximum annual allowance of £50,000. In addition, it is possible to pay (carry forward) the difference between £50,000 and what was actually paid for the three tax years from 2008/09.
However, you do need to have sufficient earnings for the tax year during which you utilise carry forward, to make the full contribution. For example, if you had available carry forward of £75,000, you would need to have earnings of at least £75,000 in the tax year of payment. Moreover, you can only claim back tax that you have paid, based on the current tax year.
Please let us now if you would like to consider making an additional pension contribution to take advantage of this enhanced relief.
For further information either contact your usual adviser or Jan Farnworth on 0191 2321151 or by email jan.farnworth@lycetts.co.uk
