RE289 - Personal Pension Relief: carry-back of contributions

A member may elect to have a contribution, or part of it, treated as paid

• in the previous year of assessment, or
• if there were no Net Relevant Earnings in the previous year, in the year of assessment before that.

Employer contributions cannot be carried back under any circumstances.

TIME LIMIT FOR ELECTION

An election to carry back must be made by 5 July following the end of the year of assessment in which the contribution being carried back was paid. For payments made for 1996-97 onwards the time limit is extended to 31 January following the year of payment.

FORM OF ELECTION

Individuals should normally make an election to carry back on form PP43.

This form ensures that all the information (some of which goes to pension providers) is received in a standard form. In most cases a form PP43 will in fact be submitted, but a letter providing all the necessary information and signed by the taxpayer may be accepted.

LATE ELECTIONS

You should, initially, refuse elections received after 5 July/31 January. However, if your decision is disputed by the individual or agent you no longer have to refer to the PSO in all cases.

Late elections should be considered in the District by an RE (with advice from the line manager, where necessary) and may generally be accepted in the following circumstances

• where the ill-health of the taxpayer or his immediate family has prevented the making of the election
• where a further assessment has been made and TMA70/S43A applies (see IH4111). (The further relief obtained may not exceed the tax chargeable under the further assessment)
• if there is a clear IN-DATE indication on the file that it was intended to make an election, for example in the form of a letter, a notice of appeal, a note on the tax return etc.
• if the Revenue has been at fault through delay or non-reply to a request for advice or a form PP43 and it is considered the election should be accepted under the terms of the taxpayer's charter. This type of case should always be referred to the line manager.

In all other cases, you should refuse the late election. In particular, the following are NOT considered to be valid reasons for acceptance

• absence of agreed accounts or assessments (unless TMA70/S43A applies)
• submission of an averaging claim
• where the individual or his agent argues that it was not known until after 5 July/31 January whether or not an election would be advantageous (in these circumstances, you should advise them that there is no disadvantage in submitting a protective election since any amount unrelievable in the earlier year automatically returns to the year of payment)
• where the delay is the fault of the agent and it is argued that his client should not be penalised.

Contentious cases of real doubt or difficulty may still be referred to the PSO (via the Officer in Charge) with full report of the facts.

AMENDMENT OR WITHDRAWAL OF ELECTION (UP TO 1995-96)

An election can be amended or withdrawn within the same time limits as that for making an election. Where an election has been made and it subsequently turns out that full relief is not available in the earlier year, you should automatically consider the urelieved amount for relief in the year of payment. If it is still not relievable, you should submit copies of your calculations and forms PPCC/receipts to FICO (Advice on Schemes) to enable FICO to contact the PP scheme and authorise a repayment of the excess contributions. In these cases, it is not necessary for the election to be formally amended or withdrawn within the time limit.

AMENDMENT OR WITHDRAWAL OF ELECTION (FROM 1996-97)

New rules apply for 1996-97 onwards for amendments and withdrawals of claims and elections. Where a stand alone claim is made the individual has twelve months from the date of the claim to amend or withdraw it. Where a claim is made in a return then the individual can amend or withdraw the claim by making an amendment to the return. An individual has twelve months from the filing date in which to make an amendment to the return.