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

Triggering the MPAA does not destroy your client's carry-forward. It survives the trigger. What it can never do is sit against the £10,000 money-purchase cap. It still works for the defined-benefit side and the default test — so the rule of thumb that “the MPAA wipes carry forward” is the trap, not the rule.

The cordon, not the wipe

If post-trigger DC input exceeds the MPAA, compare both chargeable amounts (PTM056510). That input is measured against the £10,000 MPAA — and no carry-forward can be added to it. Other inputs, including DB accrual and pre-trigger DC input, are 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; FA 2004 s.227B(2)) — 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 larger. If post-trigger DC input is at or below the MPAA, use only the default total-input test, with any taper and available carry-forward.

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

A prior trigger alone does not identify the unused-allowance basis. PTM056510’s first example uses the ordinary allowance where DC stayed below the MPAA; a year in which the MPAA was exceeded needs the alternative-allowance basis for other inputs. Verify the actual split and that year’s rules (FA 2004 s.228A(8)). ParaplanAI flags such a year for the paraplanner to verify, because the split can't be derived from headline figures alone.

Letting carry-forward soak up a money-purchase excess over the £10,000 cap 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) · PTM056510 (MPAA & the alternative allowance) · FA 2004 s.227B(2) (£50,000 alternative annual allowance: the annual allowance less £10,000 ; PTM056510 still prints £30,000 for 2023-24 onwards) · FA 2004 s.228A(8)