Annual pension allowance

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Client has paid 75k into SIPP for 2016-2017  he has done this using his unused allowane for the previous 3 years.

I want to enter 75k in box 1 tax reliefs as he has only received tax relief at 20% and he is higher rate taxpayer but not over 100k

I estimate he is about 3k over his annual allowance and will enter this in box 10-12 in the additional information page.  Where do I report to

HMRC that although 75k is over this year I had unused allowances from previous years.  Do I just type this in the additional information?  Will they allow the extra tax relief on 75k in one year.  All the 75k was invested in the 2016 to 2017 tax year, using up the previous allowances. 

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By Matrix
21st Jan 2018 21:14

Tax relief will only be due on the pension contribution attributable to his 2016-17 earned income and so the gross pension equal to this amount should be entered in this box for the additional tax relief to apply. If he has contributed more then the excess does not qualify for either higher rate tax relief nor basic rate tax relief and he will need to advise the pension scheme if basic rate tax relief has been claimed in error.

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By Ruddles
21st Jan 2018 22:06

Does the tax return not ask if the taxpayer is liable to an excess charge?

That aside, assuming he has sufficient NRE to cover the contribution relief is given for the year in which it is paid - there is no need to advise HMRC that unused allowances have been utilised.

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