1.【Answer】A B。
Individuals can always make gross pension contributions of £3,600 in 2018/19 even if they do not have any relevant earnings in that tax year.
Relevant earnings relate both to contributions to personal pension schemes and to occupational pension schemes.
Unused relevant earnings cannot be carried forward. Relevant earnings include trading income, employment income and income from furnished holiday lettings.
2.【Answer】
| Employer contributions do not count towards the annual allowance. | FALSE | |
| The annual allowance can be carried forward for three years to the extent that it is unused in the tax year. | TRUE | |
| The annual allowance is available even if the individual is not a member of a pension scheme in a tax year and so can be carried forward. | FALSE | |
| If tax-relievable pension contributions exceed the annual allowance, there is a charge to income tax. | TRUE |
3.【Answer】£15,200
The available annual allowance is £(40,000+20,000)=£60,000 and so there is no annual allowance charge for the tax year 2019/20. The basic rate band limit is £(37,500 + 49,000) = £86,500 so all of Anne's taxable income is within the basic rate band.
Tax £76,000×20% £15,200
4.【Answer】£6,000
The annual allowance must be tapered because Basil's adjusted income before any deduction for the pension contribution is more than £150,000. Basil is still a higher rate taxpayer because his higher rate limit is lifted by the gross pension contribution.
Annual allowance
£40,000 - [1/2 × £(160,000 - 150,000)] £35,000
Excess pension contribution over annual allowance
£(50,000 - 35,000) @ 40% £6,000
5.【Answer】C。
Maximum personal pension contribution is £3,600 since Chloe has no relevant earnings. The pension tax relief is therefore £3,600 × 20% = £720. This relief will have been given at source. The remaining £4,600 contribution is not given tax relief.
