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Document What is carry forward?

If you are an active or deferred member of a registered pension scheme you can carry forward any unused Annual Allowance from the previous three tax years to a current tax year to increase the available Annual Allowance.

You will have unused Annual Allowance if you were an active member and the total pension input amount in a previous tax year was less than the Annual Allowance or you were a deferred member in one or more of the previous three tax years with no pension input amount. The unused Annual Allowance for the previous tax year is the difference between the total pension input amount for that year and the Annual Allowance in that tax year.
 
Unused Annual Allowance can be added to the current year’s Annual Allowance. This will give you a higher amount of available Annual Allowance to offset against that year’s total pension input amount.

There is a strict order in which available Annual Allowance must be used. Unused Annual Allowance for the current tax year should be used first, then any from the previous three tax years, beginning with the earliest tax year first.

Carry forward for tax year 2015/2016 was different because of the pre and post-alignment pension input periods. The Annual Allowance for the pre-alignment pension input period was £80,000 and members could carry forward any unused annual allowance from the three tax years 2014/2015, 2013/2014 and 2012/2013.

If there was any unused Annual Allowance, of £80,000, from the pre-alignment pension input period this could be carried forward to the post-alignment period, however only up to a maximum £40,000. If there was any unused Annual Allowance from the three tax years 2014/15, 2013/14 and 2012/13 then this could be added to the amount carried over from the pre-alignment pension input period.
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