The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the following terms:
Defined benefit arrangements
Money purchase annual allowance
Money purchase arrangements
National Employment Savings Trust
Net payment arrangement
Occupational pension schemes
Pension commencement lump sum
Pension input amount
Pension input period
Registered pension scheme
Regulated investment advice
Relevant UK earnings
Relief at source
Retirement annuity contract
Short service refund lump sum
Trivial commutation lump sum
Uncrystallised funds pension lump sums
The annual allowance is the maximum amount which can be contributed (or deemed to be contributed) in a pension input period without the member incurring a tax charge.
The annual allowance for 2010/11 was £255,000. For 2011/12, the annual allowance was significantly reduced to £50,000 and further reduced to £40,000 with respect to the 2014/15 tax year onwards.
The annual allowance is tapered where the individual is a ‘high-income individual’. From 6 April 2020, this means someone with adjusted income of over £240,000. Between 6 April 2016 and 2020, this meant someone with adjusted income over £150,000.
The annual allowance and the tapering of the annual allowance is discussed in detail in the Annual allowance guidance note.
Employers are required to automatically enrol eligible employees into a qualifying pension scheme and make contributions on the employees’ behalf. Employees may voluntarily opt out of the automatic enrolment regime.
Those employees with lifetime allowance protection will need to opt out to ensure the conditions of the protection are not breached. See the Lifetime allowance guidance note.
Some workers may not be entitled to be automatically enrolled into a workplace pension but may opt into one. Whether or not they qualify for an employer contribution depends on the level of their earnings.
For more information, see the Automatic enrolment ― overview guidance note.
This term only relates to occupational schemes which are defined benefit arrangements. A deferred member is an employee who
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