- This topic has 2 replies, 2 voices, and was last updated 1 year ago by
.
-
Posts
-
BF AA from 22.23 19000
Current yr AA. 4000
Equals. 23000
Less Employers
Cont. -9000
Max employee
Cont equals. 14000I was doing a question from Kaplan. I understand that as the adj income is over 312000 she is only entitled to 4000 AA. I understand that she can use the rollover of 19000. I’m unsure why we are deducting the employer contribution.
I must be missing something, I know we add the employer contribution along with the employee contribution to find the adj income . This was in the answer to a section C question called Dill.
Please could you help me understand
Thank you
AI updated me, I’m early in my studies and didn’t realise the employer contribution was included when considering maximum contribution. Probably getting confused as it’s an exempt benefit.
AI
Yes, the employer pension contribution is included in the maximum annual allowance. The annual allowance acts as an overall limit for total gross pension contributions, which includes both employee and employer contributions. If the total contributions exceed the annual allowance, including any unused allowances brought forward, there will be an annual allowance charge.
- You must be logged in to reply to this topic.