Tailor your return 18 - Pension savings tax charges

Lifetime allowance for pension schemes

You may be provided with benefits up to any level under your registered pension scheme or schemes. But where your benefit entitlement uses up more than your available lifetime allowance when you decide to take your benefits, turn 75 years old or transfer your pension overseas, there will be a tax charge on the excess.

Tax on your private pension contributions

Check if your pension savings exceed the lifetime allowance

The lifetime allowance applies to any pension savings you have in:

• a registered pension scheme
• an overseas pension scheme that qualifies for UK tax relief for either you or your employer on or after 5 April 2006

The lifetime allowance is currently £1,073,100, unless you have some form of protection giving you a higher lifetime allowance.

The lifetime allowance applies even if you're in a pension scheme that you do not make payments into, for example, if you're in a workplace pension that only your employer makes payments into.

Annual allowance charge for pension schemes

If your total pension savings for a 'pension input period' ending in a tax year are more than the annual allowance, which is £40,000 for 6 April 2020 to 5 April 2021, you'll be liable to pay an annual allowance tax charge on the excess amount above the annual allowance and you must complete a Self Assessment tax return. You can reduce the charge if you've any unused annual allowance from the previous 3 tax years.

Pension savings tax charges

Based on the above information, if you're liable to pension savings tax charges or have received payments from overseas pension schemes, select 'Yes' otherwise, select 'No'.

If your pension scheme is a UK-registered pension scheme, the pension scheme administrator should tell you if any pension savings tax charges apply.