Annual Allowance:
AA
Used
Un-used
CY 22/23
40,000
21/22
40,000
(23,000)
17,000
20/21
40,000
(28,000)
12,000
19/20
N/a as not in the pension scheme
Pension contribution:
22/23
60,000
Less: C/Y AA
(40,000)
Less: B/fwd FIFO - 20/21
(12,000)
Less: B/fwd 21/22
( 8,000)
Tax relief will therefore be available on the full contribution of £60,000 (gross) made in 2022/23
and George will have £9,000 (17,000 - 8,000) of unused allowance from 2021/22 to carry
forward to 2023/24 which will permit a maximum allowable gross contribution of £49,000 to be
made in 2023/24.
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(b)
Osbourne – Income Tax Computation 2022/23
Income Tax Liability:
Note 1
Adjusted Net Income = 170,000 - 90,000 = 80,000. As this does not exceed 100,000 there is
no restriction of PA.
Note 2
The basic and higher rate bands are extended by the gross amount of personal pension
contributions (37,700 + 90,000) = 127,700 and (150,000 + 90,000) = 240,000.
Note 3
Osbourne with employment income of £170,000 pa. He has a full annual allowance for
2022/23 and in 2021/22 has £30,000 (40,000 - 10,000) brought forward unused allowance making a
total of £70,000
There is no unused AA brought forward from earlier years. Therefore in 2022/23 an Annual Allowance
Charge will arise of £20,000 (90,000 – 70,000) which is taxed at a marginal rate of 40%. as the
£20,000 AA charge all falls within the extended higher rate band limit.
£
Employment Income
170,000
Personal Allowance (note 1)
(12,570)
Taxable Income
157,430
127,700 (note 2)
@ 20%
25,540
30,000
@ 40%
12,000
AA Charge (note 3)
20,000
@ 40%
8,000
45,540
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