The tapered annual allowance reduces the standard £60,000 allowance for high earners. It applies when a member’s adjusted income exceeds £260,000.
The allowance reduces by £1 for every £2 of adjusted income above £260,000, down to a minimum of £10,000 (reached at £360,000 adjusted income).
Threshold income: If the member’s threshold income is £200,000 or below, the taper does not apply regardless of adjusted income.
Carry forward: Unused allowance from the previous 3 tax years can still be carried forward.
Important: Jarvis cannot provide financial advice. If a client may be affected, recommend a qualified financial adviser.