Tapered annual allowance
smith
Member
Morning all,
I'm looking a a calc for a couple of clients.
As part of their remuneration across the last few years, they have received either a bonus, or shares, or a mix. I'm guessing that these values are interchangeable, so in a year where there is £25k bonus and £30k shares, I add £55k to his remuneration?
Cheers
Comments
You only add the shares if they are a component of their total income at step 1 of the UK income tax computation.
The starting point for taper calcs is the income after step 2.
I always ask for submitted tax returns and pension contribution histories when I do taper calculations. Clients frequently don't know what of the income is taxable (gross rent vs taxable rental profit being a common example), and in this case the shares might be taxable pay or they might be deferred. The tax return will tell you.