This is a simplified summary of what is included within threshold income. If you think you’re affected by the tapered annual allowance, we strongly recommend you speak to a financial adviser.
You need to take your total income for the tax year; this could be things like any salary, bonuses, pension income, income from property, savings, or dividends.
From this, you can deduct certain reliefs allowed for under income tax rules, and the value of any contributions being made by an individual to a relief at source pension plan (e.g. a personal pension plan). You can also deduct the value of any lump sum death benefits received from a pension if these were subject to income tax.
You then need to add on the value of any pension contributions made as a result of a salary sacrifice (also known as salary exchange) if the arrangement was entered into on or after 9 July 2015.
If this comes to more than £110,000 then you could be affected by the tapered annual allowance if your adjusted income is also over £150,000.