Does the MPAA wipe out carry forward?

No — that’s a common misconception. Carry-forward survives an MPAA trigger. It just can never be set against the £10,000 money-purchase cap. It remains available for the alternative annual allowance (the defined-benefit leg) and the default test (PTM055100).

Can you carry forward after triggering the MPAA?

Yes, for defined-benefit accrual, which is tested against the alternative annual allowance (£50,000 while the standard AA is £60,000 and the MPAA £10,000). You cannot use carry-forward against the MPAA itself, so a money-purchase excess over £10,000 is always chargeable.

What is the alternative annual allowance?

The standard annual allowance minus the MPAA — £50,000 at today’s levels (£60,000 − £10,000). After an MPAA trigger, defined-benefit accrual is tested against it, and carry-forward can be set against that leg.

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MPAA and carry forward: what survives a trigger and what doesn’t

The trap here is the folklore: “the MPAA wipes carry forward.” It doesn’t. It cordons it — carry-forward survives, just never against the money-purchase cap itself.

5 min read · Last reviewed 16 Jun 2026

Triggering the MPAA does notdestroy your client's carry-forward. The old rule of thumb — “the MPAA wipes carry forward” — is itself the trap. What actually happens is narrower: carry-forward survives, but it can never be set against the £10,000 money-purchase cap. It still works for the defined-benefit side and the default test.

The cordon, not the wipe

Once the MPAA applies, the member is tested two ways (PTM056500). Defined-contribution input is measured against the £10,000 MPAA — and no carry-forward can be added to it. Any other accrual (defined benefit) is measured against the alternative annual allowance: the normal allowance minus the MPAA, so £50,000 while both sit at today's levels (£60,000 − £10,000) — and carry-forward can be set against that. There's also a “default” test of total input against the full allowance plus carry-forward; the member pays whichever of the two chargeable amounts is the relevant one.

After an MPAA trigger — where carry-forward can and can’t go (2025/26)

DC input: £15,000
Money purchase annual allowance: £10,000
Carry-forward against the MPAA: £0 (never available)
DC amount carried to the charge: £5,000
Alternative annual allowance (DB leg): £50,000
Carry-forward against the alternative AA: available

So the £5,000 of money-purchase excess is chargeable however much carry-forward exists — three years of unused allowance can't touch it. But a member with significant defined-benefit accrual can still use carry-forward to cover the DB leg, exactly as before.

The prior-year wrinkle

One subtlety the engine flags rather than guesses. Unused allowance generated bya year in which the MPAA already applied is measured against that year's alternativeallowance, not the full one — so it can be smaller than a naïve “£60,000 minus input” would suggest. ParaplanAI emits a CF_MPAA_PRIOR_YEAR_BASIS flag for the paraplanner to verify, because the split can't be derived from headline figures alone (ADR-038).

A spreadsheet that lets carry-forward soak up a money-purchase excess understates the charge — the worst direction for compliance. Test DC input against the cap, with the default-versus-alternative working shown, on the MPAA calculator, and isolate the reach-back on the carry forward calculator. What triggers the MPAA in the first place is in does a UFPLS trigger the MPAA?; the full carry-forward mechanics are in the carry-forward explainer.

PTM055100 (carry-forward) · PTM056500 (MPAA & the alternative allowance) · engine reading ADR-038 · MPAA-flag persistence ADR-007

Common questions

Does the MPAA wipe out carry forward?: No — that’s a common misconception. Carry-forward survives an MPAA trigger. It just can never be set against the £10,000 money-purchase cap. It remains available for the alternative annual allowance (the defined-benefit leg) and the default test (PTM055100).
Can you carry forward after triggering the MPAA?: Yes, for defined-benefit accrual, which is tested against the alternative annual allowance (£50,000 while the standard AA is £60,000 and the MPAA £10,000). You cannot use carry-forward against the MPAA itself, so a money-purchase excess over £10,000 is always chargeable.
What is the alternative annual allowance?: The standard annual allowance minus the MPAA — £50,000 at today’s levels (£60,000 − £10,000). After an MPAA trigger, defined-benefit accrual is tested against it, and carry-forward can be set against that leg.
Does carry-forward from before the MPAA was triggered still count?: Yes, but unused allowance generated in a year the MPAA already applied is measured against that year’s alternative allowance, not the full one — so it can be smaller. ParaplanAI flags those years for the paraplanner to verify rather than guessing the split.

Sources & grounding

Rule basis: HMRC PTM055100 / PTM056500 — once the MPAA applies, carry-forward can never be set against the MPAA, but it survives for the alternative annual allowance (the DB leg) and the default chargeable-amount test. Engine reading: ADR-038 (2026-06-10) — MPAA cordons carry-forward, it does not wipe it; the engine emits CF_MPAA_PRIOR_YEAR_BASIS where a prior MPAA year’s unused allowance is on the alternative-AA basis.
Figures: £10,000 MPAA and the £15,000 DC input → £5,000 excess example re-used from the published MPAA explainer; alternative annual allowance £50,000 (£60,000 − £10,000) from the same; carry-forward survives for that leg.
MPAA-flag persistence after a full DC exit is open question Q1; the engine treats it as permanent (ADR-007).

For planning and illustration purposes only. Verify all inputs against source documents. This explainer does not constitute financial or tax advice.