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  • FIRST POST
    • nxdmsandkaskdjaqd
    • By nxdmsandkaskdjaqd 3rd Jan 17, 8:39 AM
    • 495Posts
    • 49Thanks
    nxdmsandkaskdjaqd
    Paying £2880 into pension when retired
    • #1
    • 3rd Jan 17, 8:39 AM
    Paying £2880 into pension when retired 3rd Jan 17 at 8:39 AM
    Jamesd wrote in another thread the following:
    "She can make £720 a year tax free by paying 2880 net into a pension, having it grossed up to 3600 then withdrawing it. Can only do the withdrawing part from age 55. Can only pay in for this until age 75."

    I have just retired at 60 and have transferred my DC pension to a new SIPP. I plan to live off savings till state pension kicks in.

    I am correct that the above approach should be part of my strategy of being tax efficient?
    Last edited by nxdmsandkaskdjaqd; 03-01-2017 at 10:14 AM.
Page 28
    • Dazed and confused
    • By Dazed and confused 12th Feb 18, 9:16 PM
    • 2,172 Posts
    • 991 Thanks
    Dazed and confused
    Dorian1958

    Assuming you are referring to a personal pension or SIPP then it should be declared on the self assessment return but it will not make any difference to the self assessment tax bill.

    The basic rate tax relief of £720 would still be claimed by the pension company and added to the pension fund but there is no personal tax savings in this situation.
    • Dorian1958
    • By Dorian1958 14th Feb 18, 7:03 PM
    • 126 Posts
    • 87 Thanks
    Dorian1958
    Thanks Dazed, thought it might be too good to be true.
    • Dazed and confused
    • By Dazed and confused 14th Feb 18, 7:13 PM
    • 2,172 Posts
    • 991 Thanks
    Dazed and confused
    You would still be getting a pension pot of £3,600 for a payment of £2880 so not all bad!
  • jamesd
    Thanks Dazed, thought it might be too good to be true.
    Originally posted by Dorian1958
    Unfortunately you've been incorrectly told that there is no benefit for you when there is a £180 benefit.

    When you take the pension money, 25% is normally tax free, won't be taxed by the pension firm and doesn't need to be declared to HMRC. So you get one quarter of the £720 as your tax gain.
    • Dorian1958
    • By Dorian1958 16th Feb 18, 1:47 PM
    • 126 Posts
    • 87 Thanks
    Dorian1958
    Thanks jamesd, it all helps!
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