Funds Insider - Opening the door to funds

Welcome to the Citywire Funds Insider Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error
Do you include tax relief when working out Pension Annual Allowance
+ Reply to discussion
Options
chazza
Posted: 04 February 2023 16:01:16(UTC)
#14

Joined: 13/08/2010(UTC)
Posts: 606

Thanks: 509 times
Was thanked: 1120 time(s) in 384 post(s)
Newbie at #10:

Anyone under age 75 can contribute up to £3600 to a SIPP - that is £2880 net, which HMRC makes up to £3600, whether or not the subscriber is a taxpayer.

A teenager (or any one) earning c. £3000 can still contribute up to £3600 as that amount is higher than the actual income (which is not high enough to reach tax threshold in any case).
Back to top Quote
 |  Edit by user
1 user thanked chazza for this post.
Newbie on 04/02/2023(UTC)
Newbie
Posted: 04 February 2023 17:41:46(UTC)
#15

Joined: 31/01/2012(UTC)
Posts: 3,819
chazza;256419 wrote:
Newbie at #10:

Anyone under age 75 can contribute up to £3600 to a SIPP - that is £2880 net, which HMRC makes up to £3600, whether or not the subscriber is a taxpayer.

A teenager (or any one) earning c. £3000 can still contribute up to £3600 as that amount his higher than the actual income (which is not high enough to reach tax threshold in any case).

Thank you

Do yo know if one can you back track for the previous 3 years - ie ,
3600 for 2019/20
3600 for 2020/21
3600 for 2021/22
Back to top Quote
Newbie
Posted: 04 February 2023 17:43:25(UTC)
#12

Joined: 31/01/2012(UTC)
Posts: 3,819
Tyrion Lannister;256184 wrote:
Newbie;256170 wrote:
Slightly off topic.

I am aware that a child or non tax payer can put up to £3600 (£2880 net) into a pension.
Does anyone know if you are allowed to go back 3 years with this also ?
In other words
a) for a young child with not income can I put in 3 years allowance
b) for a teenager who is doing part-time work and has income of say £3k ish can they go back 3 years also.

Thanks in advance.


As I understand it you can go back for a or b but you can’t put in more than the teenager earned in each individual tax year year.

Great

So am I correct in thinking that for a I can put in 4 years allowance in total
£3600 for this year and
£3600 x 3 for previous years
Back to top Quote
 |  Edit by user
chazza
Posted: 04 February 2023 18:18:22(UTC)
#16

Joined: 13/08/2010(UTC)
Posts: 606

Thanks: 509 times
Was thanked: 1120 time(s) in 384 post(s)
Newbie:

it would appear that you CANNOT make contributions for previous years, unless you / they were already members of a registered scheme at that earlier point in time.

See this from Money Helper:
https://www.moneyhelper....-pensions/carry-forward

"Making use of unused annual allowances
Carry forward allows you to make use of any annual allowance that you might not have used during the three previous tax years,
Quote:
provided that you were a member of a registered pension scheme during the relevant time period.

To use carry forward, there are certain conditions that need to be met. These include:

1. Contributions to your pensions must have used all of your annual allowance in the tax year you wish to use the carry forward rules.

2. You must have been a member of a UK-registered pension scheme* (this does not include the State Pension) in each of the tax years from which you wish to carry forward from (you do not need to have paid any money into these schemes).
Back to top Quote
2 users thanked chazza for this post.
Newbie on 05/02/2023(UTC), Sara G on 05/02/2023(UTC)
HUFC
Posted: 05 February 2023 09:40:05(UTC)
#17

Joined: 20/05/2010(UTC)
Posts: 77
Nobody appears to have mentioned tax relief at source - i.e. contributing via payroll. Where this takes place, the pension contribution should attract tax relief at the investor's marginal tax rate. The only reporting then required via self-assessment is the total pension contributions made during the tax year, & the tax relief is obtained through lower payroll PAYE deductions
Back to top Quote
Joe Soap
Posted: 05 February 2023 09:55:29(UTC)
#18

Joined: 24/01/2010(UTC)
Posts: 2,157

Thanks: 1342 times
Was thanked: 3842 time(s) in 1473 post(s)
If you have triggered the MPAA, you have the £4000 contribution allowance but the ability to carry forward three previous years is stopped.

There's an article in the Sunday Times money section today discussing issues with retired persons who might wish to return to work and the various tax disincentives to doing so. Specifically mentions it.

Article is paywalled as usual but if you search for the text "What you need to know if you are going back to work" you will find links to the article.
Back to top Quote
1 user thanked Joe Soap for this post.
Sara G on 05/02/2023(UTC)
2 PagesPrevious page12
+ Reply to discussion

Markets

Other markets