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Where Taxpayers and Advisers Meet

Pension taper and property losses carried forward from earlier years

Posts: 432
Joined: Mon Feb 13, 2017 10:09 am

Pension taper and property losses carried forward from earlier years

Postby someone » Sun Apr 21, 2019 6:04 pm

Year 1:
Income 280000
Property losses 15000

Pension annual allowance is tapered down to 10K regardless of whether the property losses are used to reduce the taxable income and hence the "net income"

Year 2:
Income 160000
Property profit 15000

The property profit in year 2 uses up the losses from the previous year so there is no tax to pay on it. However, is the pension annual taper calculated on:
1) 160000 (tapered down to 35000)
2) 175000 (tapered down to 27500)?

As the pension annual allowance has not been exceeded in year 2, the tax due is identical in both cases but there is a significant difference in pension allowance that can be carried over to year 3.

Is there someone at HMRC I can write to to get a definitive answer? I don't need an answer quickly...

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