Endings and beginnings - planning around the tax years

In this article, we have summarised some of the principal financial planning issues to consider both in the run up to the end of the current tax year and the start of the new one. This year the last working day of the tax year is 5th April itself, which falls on a Thursday. There is no Spring Budget this year but the government will publish its Spring Statement on Tuesday 13th March – however this is supposed to just consist of a response to the OBR’s revised forecast and some longer term thinking ahead of the Autumn Budget rather than being a major fiscal event.

If an individual exceeds the standard Annual Allowance (AA) or their tapered annual allowance if applicable, it is possible, if eligible, to look back and consider whether there is any unused AA in the 3 previous tax years (up to £40,000 in each of 2014/15, 2015/16 and 2016/17). As long as an individual has been a member of a registered pension scheme at some point in each year being carried forward from, it doesn’t matter whether they actually made any pension contributions in that tax year. Also, the person does not have to make contributions to the pension arrangement that they have been a member of in order to utilise carry forward – they can make contributions to a different pension arrangement. The ability to carry forward from 2014/15 will be lost after 5th April 2018. Our Carry Forward technical guide is available here.

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