Guidance

HS345 Pension savings — tax charges (2024)

Updated 6 April 2024

This helpsheet will help you complete the ‘Pension Savings Tax Charges’ section on page Ai 4 of the additional information pages.

This helpsheet applies to you if you are a member of any:

• registered pension schemes
• overseas pension schemes that are not UK registered pension schemes but contain UK tax-relieved funds

For more information about the lifetime allowance you can read PTM091100, the annual allowance you can read PTM051100 and for overseas pension schemes that are not UK registered schemes but contain UK tax-relieved funds you can read ‘Tax on your private pension contributions’. For the unauthorised  payments charge and surcharge read ‘Tax when you get a pension’.

HMRC provides more detailed guidance in the Pensions Tax Manual which is referenced in this helpsheet.

Boxes 7 to 9 Lifetime allowance charge

The Lifetime Allowance Charge was abolished with effect from the 2023 to 2024 tax year and for subsequent years. No amounts should be entered in boxes 7 to 9 of the return for this year or for subsequent years.

Find out more details about the changes to the Lifetime Allowance Charge in PTM091100.

Tax summary

Use the working sheet — total pension savings tax charges (2024) to help you work out the total pension savings tax charge figure to include at box 6 on the ‘Tax calculation’ summary pages.

General note on taxation of pensions

The pension to be entered in box 11 on page TR 3 of your tax return should include any pension income you receive in 2023 to 2024. Count only the gross, before PAYE tax, pension you receive.

Boxes 10 and 11 annual allowance charge

You must complete box 10 if you have exceeded your annual allowance for 2023 to 2024. Exceeding your annual allowance means you’ll have an annual allowance charge.

If your pension scheme is paying some or all of your annual allowance charge:

• ensure you enter the amount they are paying at box 11, otherwise we’ll ask you to pay that amount (read the Working out and paying the annual allowance charge section of this guidance)
• put the pension scheme tax reference number in box 12 (read the Box 12 Pension Scheme Tax Reference (PSTR) number section of this guidance)

But if you’re the personal representative of someone who died during 2023 to 2024 and you’re filling in this return on that person’s behalf for the period up to the date of death, you can ignore boxes 10, 11 and, so far as it relates to the annual allowance charge, box 12.

Box 10 Amount saved towards your pension, in the period covered by this tax return, in excess of the annual allowance

The annual allowance test applies to the value of your pension savings which have arisen in the tax year 2023 to 2024, the tax year in this context may be referred to as your ‘pension input period for 2023 to 2024.

You are liable to an annual allowance charge if, in 2023 to 2024, the amount of your pension savings in registered pension schemes and certain overseas pension schemes was more than your annual allowance. The charge applies to the ‘excess amount’, that’s the part of your pension savings over your annual allowance.

Enter in box 10 only the part of your pension savings over your annual allowance. For example, if the amount of your pension savings is £70,000 of which £10,000 is over your annual allowance, put £10,000 in box 10.

Your pension savings are tested differently depending on the type of pension arrangement. For:

• defined contribution, ‘other’ money purchase, arrangements — the actual amount of contributions is tested
• cash balance arrangements, a form of money purchase arrangements — the increase to your promised pension pot is tested not the amount of contributions
• defined benefits arrangements — the increase in the value of your benefit rights is tested not the amount of contributions

The amount tested against the annual allowance is called your ‘pension input amount’. In the rest of this helpsheet, references to your pension input amount mean the amount of your pension savings arising in 2023 to 2024 that must be tested against the annual allowance for 2023 to 2024 and vice versa.

If you’ve more than one arrangement, whether in one or more pension schemes, your pension input amount is the total of the pension input amounts in each of those arrangements for 2023 to 2024.

You can ignore the figures from particular pension arrangements if you took all your benefits in 2023 to 2024 for those arrangements on ‘severe ill-health’ grounds. Find more information about severe ill-health (PTM051200).

Pension savings in overseas pension schemes in excess of the annual allowance

Ignore box 10 if your funds in an overseas pension scheme derive solely from UK transferred funds.

If you’ve UK tax-relieved funds in an overseas pension scheme, you may be liable to an annual allowance charge.

Even if you’ve UK tax-relieved funds you can ignore box 10 if in 2023 to 2024:

• your savings in overseas pension schemes have not increased by more than the annual allowance
• you have no rights in any UK registered pension scheme

You are liable to a tax charge if the overall amount of the increase in your pension savings, your ‘pension input amount’, in overseas pension schemes and UK registered pension schemes in the 2023 to 2024 tax year was more than your annual allowance. The charge applies to the excess amount.

If you have more than one arrangement in a scheme your pension input amount in the scheme is the total of the pension input amounts in each of those arrangements. The way in which your pension input amount in an arrangement is calculated will depend on the nature of that arrangement.

Read the SA150 Tax return notes (2023) if you have UK tax relief on contributions still to claim.

Annual allowance calculator

Use the annual allowance calculator to help you work out whether you have an annual allowance charge. However, the calculator cannot be used for all types of pension arrangements.

Pension savings statements

Your pension scheme administrator should send you a ‘pension savings statement’ when either:

• your pension input amount for that pension scheme alone is more than £60,000 for 2023 to 2024
• the scheme administrator believes you have flexibly accessed a money purchase arrangement, which includes cash balance arrangements, and your ‘money purchase input’ amount for that pension scheme alone is more than £10,000 for 2023 to 2024

Your pension scheme administrator should send you the statement by 6 October 2024. If you do not receive a pension savings statement automatically, you can ask for one from your pension scheme administrator.

If you receive such a statement, please remember to take account of pension input amounts, including any money purchase input amounts, for 2023 to 2024 relating to any other pension scheme arrangements you might have.

Your annual allowance for 2023 to 2024

The annual allowance for tax year 2023 to 2024 is £60,000. Whether that amount applies to you depends on whether you’ve:

• flexibly accessed a money purchase arrangement at any time from 6 April 2015 — ‘flexi-accessed’
• a ‘high income’, over £260,000, for 2023 to 2024
• unused annual allowance from previous tax years to carry forward

Not flexi-accessed and no high income

If you have not flexi-accessed, do not have a high income and do not have any unused annual allowance to carry forward from previous tax years, your annual allowance is £60,000.

If you have any annual allowance that you did not use in the previous three tax years you can carry it forward and add it to £60,000. The combined amount is your annual allowance.

For example, if you have £20,000 unused annual allowance to carry forward your annual allowance for 2023 to 2024 is £80,000 (£60,000 + £20,000).

Flexi-accessed but no high income

If you’ve flexi-accessed but do not have a high income, your annual allowance is either:

• £60,000, your ‘default annual allowance’
• a £10,000 ‘money purchase allowance’ for certain money purchase pension input amounts and a £50,000 ‘alternative’ annual allowance for any other pension input amounts, these two allowances are collectively, your ‘money purchase annual allowance’

Any annual allowance that you did not use in the previous 3 tax years can be carried forward and added to your default annual allowance or alternative annual allowance, whichever applies to you. However, you cannot add any unused annual allowance to the £10,000 money purchase allowance.

Your default annual allowance applies for 2023 to 2024 unless both of these apply:

• your money purchase pension input amounts for 2023 to 2024 after you flexi-accessed are more than £10,000
• applying your money purchase annual allowance results in you having a greater amount subject to the annual allowance charge compared to applying your default annual allowance

High income but not flexi-accessed

If you’ve a high income, over £260,000, for 2023 to 2024 but you have not flexi-accessed, you have a reduced annual allowance for the same year, your ‘tapered’ annual allowance.

Your tapered annual allowance is found by reducing £60,000 by £1 for every £2 of your adjusted income above £260,000. This reduction is limited so that the minimum tapered annual allowance you can have is £10,000.

You can carry forward any annual allowance that you did not use in the previous 3 tax years. Add your unused annual allowance to the reduced, ‘tapered’, annual allowance you’ve calculated.

High income and flexi-accessed

If you have a high income and you’ve flexi-accessed, your annual allowance for 2023 to 2024 is either:

• your ‘tapered’ annual allowance, what your reduced annual allowance would be if you had not flexi-accessed
• a £10,000 ‘money purchase allowance’ for certain money purchase pension input amounts and a reduced ‘alternative’ annual allowance for any other pension input amounts

These 2 allowances are collectively your ‘money purchase annual allowance’, the reduced ‘alternative’ annual allowance is found by deducting £10,000 from your tapered annual allowance, for example, if your tapered annual allowance is £10,000 your reduced alternative annual allowance is nil.

Any annual allowance that you did not use in the previous 3 tax years can be carried forward and added to your tapered annual allowance or reduced alternative annual allowance, whichever applies to you. However, you cannot add any unused annual allowance to the £10,000 ‘money purchase allowance’.

Your tapered annual allowance applies for 2023 to 2024 unless both of these apply:

• your money purchase pension input amounts for 2023 to 2024 after you flexi-accessed are more than £10,000
• applying your money purchase annual allowance results in you having a greater amount subject to the annual allowance charge compared to applying your tapered annual allowance

Unused annual allowance carry forward

You can carry forward any annual allowance you did not use in the previous 3 tax years automatically.

You do not need to make any claim to HMRC to carry forward unused annual allowance and you do not need to show this on your tax return if your unused annual allowance means that an annual allowance charge is not due.

You do need to have been a member of a registered pension scheme during each of the carry forward years.

There’s a strict order in which you use up your annual allowance. You use the annual allowance in the current tax year first. You then use your unused annual allowance from the previous 3 tax years, using the earliest tax year first.

Flexi accessing a money purchase arrangement

A money purchase annual allowance may apply to you if you’ve flexibly accessed a money purchase arrangement at any time from 6 April 2015.

In the context of flexi accessing and the money purchase annual allowance the term money purchase arrangement covers both defined contribution and cash balance arrangements.

Your pension scheme administrator may have sent you a notice telling you that you’ve flexi accessed.

There are a number of steps to determine how the money purchase annual allowance applies to you in practice, which might include a comparison test, as shown in the following steps. If you’ve a high income for 2023 to 2024 in the following steps, replace references to both:

• ‘default annual allowance’ with ‘tapered annual allowance’
• ‘alternative annual allowance’ with ‘reduced alternative annual allowance’

Remember that you can add any annual allowance you did not use in the previous 3 tax years to your default annual allowance and alternative annual allowance or, if applicable, tapered annual allowance and reduced alternative annual allowance.

Step 1

Separate your total pension input amount for 2023 to 2024 into ‘money purchase inputs’ and ‘other inputs’.

Your money purchase inputs for this purpose means if you flexi-accessed:

• before the start of 2023 to 2024, all of your money purchase pension input amounts for 2023 to 2024, if any
• during 2023 to 2024, only your money purchase pension input amounts arising in 2023 to 2024 after you flexi-accessed, if any

Your other inputs for this purpose means all of your defined benefits pension input amounts for 2023 to 2024, if any, plus if you flexi-accessed during 2023 to 2024, any of your money purchase pension input amounts arising in 2023 to 2024 up to when you flexi-accessed, if any.

Step 2

Determine whether your money purchase inputs exceed £10,000. If they do not, go to Step 3. If they do exceed £10,000, go to Step 4.

Step 3

If your money purchase inputs do not exceed £10,000, test your total pension input amount for 2023 to 2024, for all your pension arrangements, against your default annual allowance for 2023 to 2024.

If your total pension input amount exceeds your default annual allowance, put the excess amount in box 10. You do not have to carry out any further steps for the money purchase annual allowance.

Step 4

If your money purchase inputs exceed £10,000, test your other inputs against your alternative annual allowance for 2023 to 2024.

Step 5

Add the amount of your other inputs over your alternative annual allowance, if any, to the amount of your money purchase inputs over £10,000. This gives ‘excess amount 1’.

Step 6

Test your total pension input amount for 2023 to 2024, for all your pension arrangements, against your default annual allowance for 2023 to 2024. If your total pension input amount exceeds your default annual allowance, the amount over your default annual allowance is ‘excess amount 2’.

Step 7

Compare excess amount 1 with excess amount 2, if any. If excess amount 1 is more than excess amount 2, put excess amount 1 in box 10. Otherwise, put excess amount 2 in box 10.

Tapered annual allowance — What ‘high income’ is for 2023 to 2024

You’ll have a reduced, ‘tapered’, annual allowance for 2023 to 2024 if both of the following apply, your:

• ‘threshold income’ is over £260,000 — this is your income excluding any pension contributions, unless they’re paid as a salary sacrifice by your employer
• ‘adjusted income’ is over £260,000 — this is your income added to any pension contributions you or your employer make

Your tapered annual allowance is found by reducing £60,000 by £1 for every £2 of your adjusted income above £260,000. This reduction is limited so that the minimum tapered annual allowance you can have is £10,000.

If the money purchase annual allowance applies to you, your reduced alternative annual allowance is found by deducting £10,000 from your tapered annual allowance. For example, if your tapered annual allowance is £10,000 your reduced alternative annual allowance is nil.

For both threshold income and adjusted income, your ‘income’ is your total taxable income for 2023 to 2024 before any personal allowances and less certain tax reliefs, such as trading losses. Read Pension schemes: work out your tapered annual allowance for more information about threshold and adjusted income. You can find further information about threshold and adjusted income (PTM057100).

Overseas pension schemes carry forward

If you’ve been a member of the overseas pension scheme for any of the previous 3 tax years you can carry forward unused annual allowance from those earlier years. The basis on which the unused annual allowance is calculated depends on whether the annual allowance rules applied to you in those earlier years. That is did you qualify for UK tax relief in those years?

For a year in which the annual allowance rules apply, you can carry forward unused annual allowance but remember the way your pension input amount is calculated for that tax year is modified by the application of the appropriate fraction. For tax years 2014 to 2015 onwards, the appropriate fraction is (TE + TSI) divided by EI.

EI is the total amount of your employment income from any employment with an employer that made contributions to the arrangement in the relevant tax year. TE is so much of EI as is UK taxable earnings. TSI is so much of EI as constitutes taxable specific income.

If you had been a member of the scheme for any of the previous 3 tax years but the annual allowance rules did not apply to you for any year, that is, you did not qualify for UK tax relief for that year, you can still carry forward unused annual allowance. However, for the tax year in question, you do not apply the appropriate fraction to your pension input amount.

You may not be able to carry forward unused annual allowance from one or more of the previous 3 tax years if you were not a member of your current overseas pension scheme during any part of that earlier tax year. For example, because you were in a different pension scheme with your current employer, or you were in a pension scheme with another employer.

If you were in a different pension scheme in an earlier tax year you will be able to carry forward only if that other pension scheme was either a UK registered pension scheme or was, itself, an overseas pension scheme because you got UK tax relief for the year concerned for that scheme.

How to work out pension savings for a defined contribution, or other money purchase, arrangement

The amount of pension savings for a defined contribution arrangement, also known as ‘other’ money purchase arrangements, is the total contributions paid into the arrangement during the tax year.

Contributions paid into the arrangement include any contribution:

• you’ve paid to the arrangement
• your employer has paid to the arrangement
• paid by someone else on your behalf

Your contributions should include the tax relief that you get on your pension contributions, that is, the gross amount of your contributions. If an employer pays contributions to the scheme that have not been allocated to a specific member, and these are later put into your pension arrangement this is an employer contribution that should be included in the amount of your pension input when they’re allocated.

The following is not included in the pension input amount:

• contributions paid by you, or by someone other than your employer, after you’ve reached age 75
• investment income or returns

Defined contribution arrangements in overseas pension schemes

If you’ve an ‘other’ money purchase arrangement in an overseas pension scheme, your pension input amount is arrived at by adding together the:

• UK tax-relieved contributions you paid
• fraction below of the total amount of contributions paid to it by your employer

The fraction you have to apply is (TE + TSI) divided by EI.

EI is the total amount of your employment income from any employment with an employer that made contributions to the arrangement in 2023 to 2024. TE is so much of EI as is UK taxable earnings. TSI is so much of EI as constitutes taxable specific income. This fraction is calculated for the whole tax year and applied to the employer contribution paid in the relevant pension input period.

Find examples of applying the fraction (PTM113320).

Where a contribution is paid in a currency other than sterling it will need to be converted to sterling. PTM113320 also provides guidance on how to do this.

How to work out pension savings for a defined benefits arrangement or a cash balance arrangement

Defined benefits arrangement

Your pension savings amount under a defined benefits arrangement is the increase in the value of your promised benefits over the tax year.

The increase is the difference between the value of your promised benefits immediately before the start of the tax year, the opening value, and the value at the end of the tax year, the closing value. The difference is found by taking away the opening value from the closing value. If the difference is a negative amount, then your pension input for the arrangement is nil.

How to find the opening value for a defined benefits arrangement

The opening value of your benefits can be thought of as the amount of money that might be needed to provide the expected benefit. It is a notional ‘capital’ value and is determined as follows.

Step 1

Find the amount of your annual pension.

This is the amount of pension that you would be paid if you retired now at normal pension age and without any extra benefits for ill-health. So, if you took your benefits today, what would you get without any adjustment for early payment?

Step 2

Multiply the annual amount of your pension by 16.

Step 3

If your scheme also gives you a separate lump sum in addition to your pension, for example, many public sector schemes provide a lump sum without having to give up pension, add the amount of the promised lump sum to the amount found after step 2.

Step 4

Increase the total after step 3 by 3.1%.

How to find the closing value for a defined benefits arrangement

The closing value is the notional ‘capital’ value of the expected benefits at the end of the tax year in the same way as you find your opening value but missing out the final step. This is determined as follows.

Step 1

Find the amount of your annual pension.

Step 2

Multiply that amount of your pension by 16.

Step 3

If your scheme also gives you a separate lump sum in addition to your pension, for example many public sector schemes provide a lump sum without having to give up pension, add the amount of the promised lump sum to the amount found after step 2.

Read an explanation of the effect that transfers, pension credits and debits and benefit crystallisation events have on the closing value (PTM053301).

Do not count contributions you’re required to pay to a defined benefits arrangement, it’s the increase in the value of your pension rights that’s tested not the contributions you make.

Example

Rosie is a member of a defined benefits arrangement.

It is a final salary arrangement with one sixtieth accrual for the pension and no separate lump sum.

Rosie has pensionable pay at the end of 5 April 2023 of £270,000 which has risen to £280,000 by 5 April 2024. Rosie had completed 20 years 100 days of pensionable service on 5 April 2023.

This is Rosie’s only arrangement.

Rosie has unused annual allowance of £17,000 to carry forward from 2022 to 2023 but she has no unused annual allowance to carry forward from 2021 to 2022 or 2020 to 2021.

Rosie’s pension input period for the arrangement runs for the tax year, such as, 6 April 2023 to 5 April 2024.

The opening value of Rosie’s pension rights is calculated as follows:

annual pension ((20 + 100 ÷ 365) ÷ 60) × £270,000 = £91,232
£91,232× 16 = £1,459,712
increase £1,459,712 by 3.1% = £1,504,963

The closing value of Rosie’s pension rights is calculated as follows:

annual pension ((21 + 100 ÷ 365) ÷ 60) x £280,000 = £99,278
£99,278 × 16 = £1,588,448

Rosie’s pension input amount for the pension input period, that is for 2023 to 2024, is calculated as:
£1,588,448 – £1,504,963 = £83,485.

Rosie has a reduced, tapered, annual allowance for 2023 to 2024 because her threshold income exceeds £260,000 and her adjusted income exceeds £260,000, it is £365,000 when all the items comprising Rosie’s adjusted income such as rental income and savings interest are included.

To find her tapered annual allowance, Rosie reduces £60,000 by £1 for every £2 of her adjusted income over £260,000, being £105,000 (£365,000 – £260,000).

This would mean Rosie’s tapered annual allowance would be £7,500 (£60,000 – (£105,000 divided by 2)). As this is less than £10,000, Rosie’s tapered annual allowance for 2023 to 2024 is set at £10,000 to which she can add her unused annual allowance of £17,000.

Rosie has an annual allowance charge on £56,485 for the 2023 to 2024 tax year (£83,485 – (£10,000 + £17,000)).

Cash balance arrangements

The method of valuing pension savings for a cash balance arrangement is similar to that for defined benefits arrangements.

Your pension savings amount is the increase in the value of your promised pension pot over the tax year. The increase is the difference between the value of your promised pension pot immediately before the start of the tax year, the opening value, and the value at the end of the tax year, the closing value. Again, the difference is found by taking away the opening value from the closing value. If the difference is a negative amount then your pension input for the arrangement is nil.

How to find the opening value for a cash balance arrangement

This is a 2-step process:

Step 1

Find the amount of your promised pension pot immediately before the start of the tax year.

Step 2

Increase this amount by 3.1%.

How to find your closing value for a cash balance arrangement

Your closing value is the amount of your promised pension pot at the end of the tax year.

Read an explanation of the effect that transfers, pension credits and debits and benefit crystallisation events have on the closing value (PTM053400).

Do not count contributions you’re required to pay to a cash balance arrangement, it’s the increase in the value of your pension pot that is tested not the contributions you make.

Defined benefits and cash balance arrangements in overseas pension schemes

If you’ve a defined benefits arrangement or cash balance arrangement in an overseas pension scheme, the pension input amount is the greater of the:

• total amount of UK tax-relieved contributions paid by you or on your behalf, but not by an employer, to the arrangement during the tax year
• adjusted pension input amount for the tax year

The adjusted pension amount is the pension input amount, the difference between the opening and closing values, multiplied by the fraction (TE + TSI) divided by EI.

EI is the total amount of your employment income from any employment with an employer that’s sponsoring the scheme in 2023 to 2024. TE is so much of EI as is UK taxable earnings. TSI is so much of EI as constitutes taxable specific income.

Find examples of applying the fraction (PTM113320).

Where a contribution is paid in a currency other than sterling it will need to be converted to sterling. PTM113320 also provides guidance on how to do this.

You can ignore any increase in rights in an overseas pension scheme of which you were a deferred member for the whole of 2023 to 2024, provided the increase was in line with a rate set out in the scheme rules on 14 October 2010 or otherwise the increase was in line with the increases in the Consumer Prices Index for a 12-month period ending in 2023 to 2024 as chosen by your pension scheme manager.

How to work out pension savings for a hybrid arrangement

A hybrid arrangement is where there are a combination of benefit options that will depend on the circumstances at the point benefits are drawn. Use the relevant methods to calculate the amount for each of the different types of benefit option arrangements, other money purchase, defined benefits, cash balance. Your pension input amount in the hybrid arrangement is the greater, or greatest, of those amounts.

Working out and paying the annual allowance charge

The rate of the charge

Your excess pension savings can be charged to tax in whole or in part at 45%, 40% or 20% depending on your taxable income and the amount of excess pension savings. These rates can differ if you pay Scottish Income Tax or Welsh Income Tax.

Find more advice on the rate of the charge, with a worked example (PTM056110).

If your total pension input amount in overseas pension schemes in 2023 to 2024 exceeds your available annual allowance, you can convert the pension input amount to sterling by using the spot rate for 5 April 2024.

You can also use the Working Sheet to help you work out the effect of the various tax rates. This will also help you find the total pensions savings tax charge figure to include at box 6 on the ‘Tax calculation’ summary pages.

Paying the annual allowance charge from your pension savings

You’re liable to the annual allowance charge if you’ve an excess amount of pension savings for the tax year.

However, you may be able to make an election that orders the scheme administrator of your pension scheme to pay on your behalf some or all of your annual allowance charge liability relating to that scheme. Alternatively, the scheme administrator of your pension scheme or the scheme manager of your overseas pension scheme may offer on a voluntary basis to pay some of the charge on your behalf. In return there will be an appropriate reduction in your benefits in that scheme.

Read Annual allowance: tax charge: Telling HMRC (PTM056200) and Annual allowance: tax charge: Who pays (PTM056300).

Where you’ve made pension savings in more than one pension scheme there’s a maximum amount that you can order the pension scheme, where your pension savings in that scheme alone for the tax year exceeded the annual allowance, to pay.

The maximum amount is found by comparing the excess pension savings in the scheme you’ve asked to pay with the total amount of your excess pension savings for 2023 to 2024 that was charged at a rate 20%, 40% and 45% or both. The rates can differ if you pay Scottish Income Tax or Welsh Income Tax. More information about the amount you can order a pension scheme to pay is in the Pensions Tax Manual PTM056410.

When you’ve elected or agreed for your scheme administrator or scheme manager to pay an amount of the charge for you, you’re still, either entirely or jointly, liable for the whole amount but you can have a credit for any amount paid by the scheme administrator.

If the scheme administrator does pay an amount of your annual allowance charge you must record the excess amount on your tax return at box 10 as well as recording the tax paid at box 11. Read the notes for ‘Annual allowance tax paid or payable by your pension scheme’.

Box 11 Annual allowance tax paid or payable by your pension scheme

Enter the amount of your annual allowance charge for 2023 to 2024 that has or will be paid by your pension scheme administrator or by the scheme manager of your overseas pension scheme in box 11.

Where more than one pension scheme administrator or overseas pension scheme manager is paying an amount, enter the total. If you put an amount in box 11 remember to put your excess amount in box 10 as well.

If, after you file your tax return, you arrange for your pension scheme to pay the tax for you (or it’s paying more) and therefore box 11 is no longer correct, you will need to contact HMRC to amend your return.

Boxes 11.1 and 11.2 Overseas transfer charge

The overseas transfer charge arises on certain transfers that were requested on or after 9 March 2017 to a QROPS from a registered pension scheme, QROPS or former QROPS.

For a limited period of time after the transfer, if there is a change in circumstances, liability to the overseas transfer charge may also arise in respect of a transfer to a QROPS that was not originally taxable.

The overseas transfer charge due on a transfer

A transfer from a registered pension scheme to a QROPS will be liable to the tax charge if none of the following 5 conditions are met:

1. The QROPS is an occupational pension scheme and when the transfer was made you were an employee of an employer that participated in that scheme.
2. The QROPS is an overseas public service pension scheme (PTM112300) and when the transfer was made you were an employee of an employer that participated in that scheme.
3. The QROPS is established by an international organisation — such as the United Nations (read PTM112300 for the meaning of an international organisation) and when the transfer was made you were an employee of that international organisation.
4. You’re resident in the same country in which the QROPS is established.
5. You’re resident in the UK, Gibraltar or a country within the European Economic Area (EEA) and the QROPS is also established in Gibraltar or a country within the EEA.

A transfer from a registered pension scheme to a QROPS will also be liable to the tax charge if you did not give the scheme administrator all the required information prescribed by the legislation (read PTM102900 before transferring from a registered pension scheme to a QROPS).

A transfer from a QROPS or former QROPS to another QROPS will be liable to the overseas transfer charge if none of the 5 conditions are met, or before the transfer you did not give the scheme manager the required information. Read PTM102100 if you did not meet any of the 5 QROPS conditions.

However the overseas transfer charge on a transfer from a QROPS or former QROPS will not be due if the funds transferred are:

• pre-9 March 2017 funds
• not made from ring-fenced transfer funds (PTM113230)
• funds where the overseas transfer charge was paid in respect of a previous transfer
• not transferred within the relevant period of 5 full tax years from the original transfer

Find out when a transfer from a QROPS or former QROPS will not be taxable (PTM102300).

The overseas transfer charge due to a change of circumstances after the transfer

If a transfer was not liable to the overseas transfer charge because either you were resident in the:

• same country in which the QROPS is established
• UK, Gibraltar or a country within the EEA and the QROPS was established in Gibraltar or a country within the EEA

but after the transfer you change your country of residence and neither of these conditions is now met, the overseas transfer charge becomes due.

However, this only applies if this change of residence takes place within 5 full tax years from the date of the original transfer.

Read the full details on when the tax charge can arise after a transfer (PTM102400).

Responsibility for paying the tax and providing information

If the overseas transfer charge arises on a transfer from a registered pension scheme, both you and the scheme administrator are jointly liable to pay the tax charge. If the tax charge arises on a transfer from a QROPS or former QROPS you and the scheme manager of the transferring scheme are jointly liable to pay the tax.

If the tax charge arises due to a change of circumstances after the transfer, you will be jointly liable to pay the tax charge with the scheme manager of the QROPS that currently holds your pension scheme funds.

The overseas transfer charge is 25% of the ‘transferred value’ of the transfer. Please note the ‘transferred value’ is not simply the amount of the transfer.

After a transfer to a QROPS your scheme administrator or scheme manager should tell you:

• if the transfer is liable to the overseas transfer charge
• the amount of transfer that’s taxable (the ‘transferred value’)
• the amount of the overseas transfer charge
• how much tax they’ve paid or are going to pay to HMRC
• if they’ve already paid HMRC the date they did so

Where the overseas transfer charge arises due to a change of circumstances the current QROPS scheme manager should tell you:

• the amount of the overseas transfer charge due
• how much tax they’ve paid or are going to pay to HMRC
• if they’ve already paid HMRC the date they did so

Box 11.1

Enter in box 11.1 the ‘transferred value’ of the transfer. You should have been given this information by the registered pension scheme, the scheme administrator or the QROPS scheme manager.

Box 11.2

Enter in box 11.2 the amount of tax charge that the pension scheme administrator or manager has paid to HMRC. The registered pension scheme administrator or QROPS scheme manager should have given you this information.

Remember to add the Pension Scheme Tax Reference number in box 12 if you have completed boxes 11.1 and 11.2.

Box 12 Pension Scheme Tax Reference (PSTR) number

Enter the PSTR number of the pension scheme that’s paying an amount of your annual allowance charge or overseas transfer charge for 2023 to 2024 in box 12. Your pension scheme administrator should give you this information. If more than one pension scheme is paying an amount, enter the PSTR numbers of the other pension schemes in the ‘Any other information’ box on page TR7 of the tax return.

An overseas pension scheme will not have a PSTR number. Instead put the name and address of the scheme manager of the overseas pension scheme in the ‘Any other information’ box on page TR7 of the return.

Boxes 13 to 15 Unauthorised payments charge and surcharge

Do not include any unauthorised payments in box 13 and/or box 14 if you’ve given authority to the pension scheme administrator to withhold the tax that you’re due to pay for that payment and for the scheme administrator to pay that tax over to HMRC on your behalf. Otherwise, if any unauthorised payments have been paid to you (or for you) in the tax year, complete box 13 and/or box 14, as appropriate.

You can ignore boxes 13 to 16 in respect of overseas pension schemes if you were not UK resident in 2023 to 2024 or in any of the previous 5 tax years.

You may be liable to any of these charges if you have UK tax-relieved funds or UK transferred funds in an overseas pension scheme. You may have in an overseas pension scheme a mixture of:

• UK tax-relieved funds
• UK transferred funds
• other funds

If so, payments from the scheme are deemed to come first from the UK tax-relieved funds and the UK transferred funds until both of those funds are reduced to nil. Payments can only give rise to any of these charges if they’re deemed to have come from the UK tax-relieved funds or the UK transferred funds. You can find more information about that in the Pensions Tax Manual at page PTM113240.

Unauthorised payments

Unauthorised payments are payments by:

• registered pension schemes
• overseas pension schemes from the UK tax-relieved funds or the UK transferred funds

which are made either to you, or for you, and which:

• are specifically described in the pensions tax legislation as being unauthorised payments
• do not fit within the pensions tax legislation as being authorised payments

‘Payments’ need not necessarily be monetary amounts, but may include, for example, a transfer of assets. The scheme administrator or overseas pension scheme manager is likely to have told you if a payment was an unauthorised payment.

The rate of the unauthorised payments charge is 40% and any surcharge is a further 15%. Please read  Pension schemes and unauthorised payments for further information.

You can find more information about whether or not a payment is unauthorised and on how to value payments in the Pensions Tax Manual from PTM131000 and at PTM113210 for members of overseas pension schemes.

Unauthorised payments surcharge

An unauthorised payments surcharge applies where the amount of the unauthorised payments made to, or for you, in a ‘surcharge period’ reaches a set ‘surcharge threshold’. This is where the amount of the unauthorised payments from a registered pension scheme reaches 25% of the value of your rights under that scheme. Or in respect of overseas pension schemes, where the total unauthorised payments to you or for you from your UK tax-relieved funds and UK transferred funds reach 25% of the value of rights from those funds. The surcharge is an Income Tax charge of 15% of the value of the unauthorised payments and is on top of the 40% unauthorised payments charge.

A surcharge period starts on the date that the first unauthorised payment was made to you, or for you, and ends either:

• 12 months after that date
• on the day on which the surcharge threshold is reached, if earlier

So if in any 12 months the total unauthorised payments to, and for, you from a particular scheme are less than 25% of the value of your rights under that scheme, there’s no unauthorised payments surcharge.

Box 13 Amount of unauthorised payment from a pension scheme, not subject to surcharge

If you received an unauthorised payment, and the payment is not subject to the unauthorised payments surcharge, enter the amount of the unauthorised payment in box 13. You can convert a foreign payment into sterling using the spot rate for the date of payment.

Box 14 Amount of unauthorised payment from a pension scheme, subject to surcharge

If you received an unauthorised payment, and the payment is subject to the unauthorised payments surcharge, enter the amount of the unauthorised payment in box 14.

You can convert a foreign payment into sterling using the spot rate for the date of payment.

An unauthorised payment from a registered pension scheme paid to you, or for you, might have a deduction made from it to cover a tax liability that the scheme administrator of the pension scheme also has for the same payment. When such a deduction is made, the amount of the unauthorised payment you must enter in box 13 or box 14, as appropriate, is the amount before the deduction. For example, if the unauthorised payment would have been £100 but £85 is paid instead, because an amount of £15 has been deducted to cover the scheme administrator’s tax liability, you must enter £100 in the appropriate box.

The scheme administrator of the pension scheme should tell you if such a deduction has been made.

Unauthorised payment not subject to surcharge when paid which later becomes subject to surcharge

If an unauthorised payment was paid to you, or for you, in the previous tax year that was not subject to the unauthorised payments surcharge when it was paid that payment might become subject to the surcharge because of an unauthorised payment paid to you, or for you, in this tax year. This is because the further payment means the surcharge threshold is reached and all of the payments fall within the same surcharge period. If this happens, contact Self Assessment: general enquiries about your tax return for the previous tax year.

Box 15 Foreign tax paid on an unauthorised payment (in £ sterling)

As the unauthorised payments charge and surcharge are not charges on income, they’re not exempted by any of the UK’s Double Taxation Agreements. However, if a payment gives rise to a charge (and a surcharge) you can receive credit for foreign tax paid on the payment that can be set against the charge (and the surcharge).

Enter in box 15 the sterling equivalent of the amount of any foreign tax that you’ve paid on a payment entered in box 13 or box 14. You can convert the amount into sterling using the spot rate for the date of the tax payment.

If, after you’ve submitted this tax return, you pay foreign tax for a payment entered in box 13 or box 14 on which you’ve paid an unauthorised payments charge (and a surcharge), you can then make a claim for an appropriate adjustment to be made in your liability to UK tax. If you’re not sure what to do you can ask us about this.

Tax summary

Use the Working Sheet to help you work out the total pension savings tax charge figure to include at box 6 on the Tax calculation summary pages.

Boxes 16 to 18 Taxable lump sum payments from overseas pension schemes

Box 16 Taxable short service refund of contributions (overseas pension schemes only)

If you’ve not received any lump sum payments from overseas pension schemes during 2023 to 2024, do not fill in box 16.

If you left pensionable service in an overseas pension scheme, and received in 2023 to 2024 a refund of UK tax-relieved contributions that you made to that scheme, you’re liable to a tax charge on that refund.

The amount of tax due on a refund is:

• 20% on the first £20,000
• 50% on any amount over £20,000

You can find more information about short service refunds and liability to tax on them in the PTM045000 and PTM113210.

Enter the amount of your refund of UK tax-relieved contributions at box 16. You can convert the refund into sterling using the spot rate for the date of payment.

Box 18 Foreign tax paid (in £ sterling) on box 16

As the tax charge on a short service refund of contributions is not a charge on income, it’s not exempted by any of the UK’s Double Taxation Agreements. If a payment gives rise to such a charge, however, you can receive credit for foreign tax paid on the payment that can be set against the charge.

If you’ve paid foreign tax on a payment that you’ve entered in box 16, enter the sterling equivalent of the tax paid in box 18. Add the amounts together where foreign tax has been paid on more than one payment. Convert the foreign tax paid into sterling at the rate of exchange prevailing on the date of each tax payment.

If, after you’ve submitted this tax return, you pay foreign tax for a payment entered in box 16 on which you’ve paid such a UK tax charge, you can then make a claim for an appropriate adjustment to be made in your liability to UK tax. If you’re not sure what to do, you can ask us about this.

Income Tax on other lump sums and drawdown pension from overseas pension schemes

If in 2023 to 2024 you’ve received a payment of a trivial commutation lump sum, a winding-up lump sum, a taxable serious ill-health lump sum or an uncrystallised funds pension lump sum from an overseas pension scheme you’re liable to an Income Tax charge on the lump sum.

You will also have to pay Income Tax if you received a lump sum death benefit from an overseas pension scheme in respect of someone who had reached age 75 by the date they died. Or in some circumstances where the person died before reaching age 75 if the payment was made more than two years after the scheme was notified of the death.

You should include the amount that is taxable in box 17 ‘other taxable income’ on page TR 3 of your tax return. For example, if 75% of the lump sum is taxable, include 75% of the lump sum. Do not also include the amount in box 16 on page Ai4.

You can find more information about these lump sum benefits and the tax due on them in the Pensions Tax Manual at the following pages:

• a trivial commutation lump sum — PTM063500
• a winding-up lump sum — PTM063600
• a serious ill-health lump sum — PTM063400
• an uncrystallised funds pension lump sum — PTM063300
• lump sum death benefits - PTM073000

Drawdown pension during a period of ‘temporary’ non-residence

For more details about drawdown pension, read the Pensions Tax Manual subchapters at PTM062500 and PTM062700. From 6 April 2011, if you held pension savings in a defined contribution (money purchase) or cash balance arrangement in either a registered pension scheme or an overseas pension scheme (where the funds concerned have benefitted from UK tax relief), you may be able to withdraw those savings in their entirety as ‘flexible drawdown’ or ‘flexi-access drawdown’ pension income subject to meeting certain conditions.

If, during a period of temporary non-residence, you take drawdown pension from either a UK registered pension scheme or from an overseas pension scheme that is not a registered pension scheme to the extent that the payment is referable to your tax-relieved fund under the overseas scheme, then the amount taken as flexible drawdown or flexi-access drawdown is treated as taxable pension income arising in the tax year in which you resume residence in the UK.

Temporary non-residence broadly occurs if you left the UK to take up residence abroad, later resume UK residence and were both:

• solely tax resident in the UK for any part of at least 4 of the 7 tax years immediately preceding your year of departure
• not solely resident in the UK for a period of less than 5 full tax years

Nothing in any double taxation relief arrangements between the UK and the country or territory in which you were resident at the time is to be read as preventing you from being chargeable to Income Tax. However, you’ll be given a credit for any overseas tax that is charged in respect of a drawdown pension payment.

For more detail on the operation of the tax charge and what counts as temporary non-residence, read the Employment Income Manual page EIM75450.

Where you took drawdown pension from a registered pension scheme during a period of temporary non-residence, include the amounts you withdrew in box 11 of the pension section on the main Self Assessment tax return. Where it was taken from an overseas pension scheme, you should include the amounts taken in boxes for ‘overseas pensions’ on page F2 of the foreign pages

Working Sheet

Use the Working Sheet to help you work out the total amount to include as ‘Pension charges due’ at box 6 on the SA110 Tax calculation summary pages or box A335 on the SA110 Notes — tax calculation summary notes.

Contact

Online forms, phone numbers and addresses for advice on Self Assessment