My client changed his accounting date to utilise some overlap relief. He has an 18 month accounting period this tax year. His trading income over the 18 months is £180,000 and he has £60,000 of overlap relief he would like to utilise now (6/11 of overlap profits of £110,000 in early years). He wants to be sure he will not be caught by the pension contribution tapering rules on income of over £150,000. Is his income for pension contribution purposes £180,000 or is it £120,000 - being trading income over the 18 months less the overlap relief?
29th Oct 2019
Using overlap relief to avoid pension tapering
Pension tapering applies for "adjusted income" over £150k. How does overlap relief affect this?
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