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Ahmed has made the following gross contributions to his personal
pension:
£
2019/20 12,000
2020/21 26,000
2021/22 33,000
2022/23 58,000
He has relevant earnings of £100,000 each year.
State the amount of unused annual allowances to carry forward to
the tax year 2023/24.The answer:
The allowance for the current tax year must be used first,
then the unused allowance brought forward from the
previous three years, starting with the earliest tax year.
The remaining allowance from 2019/20 of £10,000 (£28,000
– £18,000) cannot be carried forward to 2023/24 as it is
more than three years ago.I get that Allowance available for 2019/2020 is £28,000 (£40,000 – £ 12,000) and the unused of 2019/2020 cannot be carried forward. But I don’t understand “£10,000 (£28,000
– £18,000)”. Can you please kindly explain?But on the grounds that it cannot be used the question is really irrelevant.
If you understood the rest of the question and got the answer correct then well done and dont worry
Thank you for your kind replies. It’s from the Kaplan study text, and I got what it means now. The used allowances for 2022/2023 is £58,000 {2022/23 – £40,000 + 2019/20 – £18,000 (£40,000- £12,000 = £28,000 but will only use £18,000)}. And the remaining £ 10,000 cannot be carried forward to 2023/24.
If I don’t understand one thing, it’s very difficult for me to move forward. My question might be a bit silly, but I hope you understand :’).
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