Carry Forward

To carry forward, you would be claiming a loss from the previous tax year as an expense in the current tax year. For example, if you made a loss of £10,000 on an investment, you could claim that as an expense against your profits in the following tax year. You can also carry forward some unused annual allowances, such as Pension Allowances.

How Does a Carry Forward Work With a Pension?

The Pension Annual Allowance is the maximum amount that you can pay into your pension in a tax year. It’s based on your income but it’s up to £60,000 in the 2023/24 tax year. In order to be able to carry forward, you need to pay the maximum amount into your pension in a tax year. As soon as you’ve done this, you’re allowed to use up to three previous year’s worth of unused allowance to add more to your pension pot. However:

  • You can’t contribute more than you’ve earned in a tax year
  • You must have been a member of a private pension scheme for each year you’re carrying forward

Also be aware that if you do this, it will need to be declared on a tax return and you won’t be eligible to claim the pension tax relief on your extra contributions.

How Do I Carry Forward A Loss?

  1. Claim the loss on your Self Assessment tax return. Even if it’s tempting not to file a return if you made a loss, it’s worth doing. You can claim it back next year
  2. Only claim the loss against profit of the same kind. Put simply, if you lose money trading Bitcoins one year, you can’t claim this loss as an expense the following year if you make profit selling a house

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