Some radical changes to the operation of the annual allowance were introduced in Sch. 4 of Finance (No. 2) Act 2015. The main features of the changes are:

a scaling back of the amount of the allowance for individuals who have income including pension contributions that exceeds £150,000 and income that excludes pension contributions of at least £110,000 (effective from 6 April 2016);

a realignment of input periods with tax years (from 5 April 2016) with a view to possible eventual abolition of input periods as a concept;

a transitional tax year (2015–16) so that nobody was retrospectively taxed as the new basis was implemented.

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