The annual allowance is the second control on tax relieved pension savings. A charge to income tax, known as the annual allowance charge, arises where the total pension input for a tax year in respect of a member of one or more registered pension schemes exceeds the annual allowance for that year (FA 2004, s. 227(1)). This excess is, with effect from the tax year 2015–16 onwards, now termed the ‘chargeable amount’ (see ¶386-005). The charge also applies, with modification, in the case of certain non-UK pension schemes (see ¶391-350).
The amount of the annual allowance has been as follows:
2006–07 – £215,000
2007–08 – £225,000
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