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Tapered annual allowance

On 6 April 2016 the government introduced the tapered annual allowance for individuals with adjusted income of over £150,000.

The contribution amount to a pension each year and the tax relief received is limited to the annual allowance. For most people this is usually £40,000 but for some high earners this may be reduced. The allowance will be ‘tapered’ according to income, although everyone will retain an allowance of at least £10,000. This means the amount which could be tax-efficiently invested into pensions each year, could change from tax year to tax year.

The tapered annual allowance video transcript
How does the tapered annual allowance work?
Will your client be affected by the tapering of the annual allowance?
How is the threshold income calculated?
How is the adjusted income calculated?
What happens if the annual allowance is exceeded?

Tapered annual allowance

Understand how you can work out your client threshold and adjusted income to see if they will be affected by the tapered annual allowance.

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