Finance Act 2011

28 (1) This paragraph applies where— U.K.

(a) the pension input period in respect of any arrangement relating to the individual which ends in the tax year 2011-12 begins before 14 October 2010 (a “straddling pension input period”), and

(b) the total pension input amount in the case of the individual for that tax year exceeds £50,000.

(2) The following provisions apply for arriving at the amount in respect of which the annual allowance charge is charged for that tax year (instead of the charge being in respect of the amount by which the total pension input amount exceeds the amount of the annual allowance).

(3) Treat each straddling pension input period as if it were 2 separate pension input periods—

(a) one beginning when the straddling pension input period begins and ending with 13 October 2010 (a “pre-announcement period”), and

(b) the other beginning with 14 October 2010 and ending when the straddling pension input period ends (a “post-announcement period”).

And treat any pension input period in respect of any arrangement relating to the individual which ends in the tax year 2011-12 which is not a straddling pension input period as if it were a post-announcement period.

(4) Arrive at the pension input amount in respect of each post-announcement period (as if it were a pension input period ending in the tax year 2011-12) and aggregate those amounts.

(5) Deduct £50,000 from that aggregate.

The result (or, if a negative amount, nil) is the post-announcement periods total.

(6) Arrive at the pension input amount in respect of each pre-announcement period (as if it were a pension input period ending in the tax year 2011-12) and aggregate those amounts.

In the case of a defined benefits arrangement, subsections (4) and (5) of section 234 of FA 2004 are to apply for the purposes of this calculation as if the references to “16” were to “10”.

(7) Deduct from that aggregate the difference between £255,000 and the lesser of—

(a) £50,000, and

(b) the aggregate arrived at under sub-paragraph (4).

The result (or, if a negative amount, nil) is the pre-announcement periods total.

(8) Aggregate the post-announcement periods total and the pre-announcement periods total.

(9) Deduct any amount by which (apart from this paragraph) the annual allowance in the case of the individual for the tax year would have been increased by virtue of section 228A of FA 2004 or, if less, by so much of any such amount as equals that aggregate.

(10) Any result is the amount in respect of which the annual allowance charge is charged for the tax year 2011-12.