David has a personal pension and he has no available carry forward. For the pension input period (PIP) ending at the end of this tax year David has contributed £50,000 to his pension.
David contributes £20,000, prior to accessing flexibility, by making an Uncrystallised Funds Pension Lump Sum (UFPLS). This triggers the Money Purchase Annual Allowance. The UFPLS is withdrawn on 1 May.
Following this, a further £30,000 is contributed to the personal pension.
1. Calculate the chargeable amount on the Money Purchase Input Sub-Total
£30,000 (post trigger input) - £4,000
MPIST chargeable amount = £26,000
2. Calculate the Defined Benefit Input Sub-Total
£0 + £20,000 (pre trigger input) - (£36,000 or the relevant lower amount should the tapered annual allowance apply + £0)
DBIST chargeable amount = £0
3. Calculate the Alternative Chargeable Amount
Step 1 result + Step 2 result
£26,000 + £0
ACA = £26,000
4. Calculate the Default Chargeable Amount
£50,000 - £40,000 or the relevant lower amount should the tapered annual allowance apply
DCA = £10,000
5. Identify the Chargeable Amount
Higher of ACA and DCA
Chargeable Amount = £26,000.