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Company director and unused pension allowances

NRE or £40k for 2017/18?

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I have client with a limited company and the following personal details for the last few tax years:

2017/18: £10k Salary + £0 pension contributions

2018/19: £10k Salary + £40k pension contributions

2019/20: £10k Salary + £40k pension contributions

2020/21: £10k Salary + £40k pension contributions

Can the company contribute an extra £10k or £40k before 05/04/2021 without a pension tax charge on the director?

The director hasn't withdrawn anything from their pension pot. Has been a member of a pension scheme since 2000 (although only recently joined the pension scheme he will actually contribute to). Director is the only director-shareholder and does all the work on behalf of the company. There will still be a profit in the company even after the contribution. 

Are NRE irrelevant where a company is making the contribution?

Replies (5)

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By Matrix
18th Mar 2021 19:45

Unused relief brought forward is £40k. NRE is not relevant for an employer contribution.

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By Duggimon
19th Mar 2021 08:28

Agreed, and payment has to clear the bank before 5 April to not lose the £40K b/fwd allowance.

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By Matrix
19th Mar 2021 09:32

Isn’t it FIFO though so there would still be £40k unused relief c/f if not used in 20-21?

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Replying to Matrix:
By Duggimon
19th Mar 2021 09:50

I was under the impression it goes current year first, then FIFO, so 17/18 will be lost without £80K going in during 20/21.

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By Matrix
19th Mar 2021 09:54

Ok. So you only look at unused relief if you exceed the annual allowance.

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