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    • neil1960
    • By neil1960 11th Sep 17, 8:36 PM
    • 13Posts
    • 4Thanks
    neil1960
    confused over tax relief
    • #1
    • 11th Sep 17, 8:36 PM
    confused over tax relief 11th Sep 17 at 8:36 PM
    Hi - I would like to set up a SIPP for my wife. She currently has a part time job earning approx £4.5k and a pension of approx £1.5k. Does this mean if we pay in £6k HMRC will add £1.2k? I've read that this tax relief can be claimed back for the last 3 years, is this true? If she leaves her job next (financial) year can we still pay in £3.6k and get a tax contribution of £720? or £5.1k (£3.6 + 1.5) and get a tax contribution of £1020.
Page 1
    • Dazed and confused
    • By Dazed and confused 11th Sep 17, 8:51 PM
    • 1,691 Posts
    • 736 Thanks
    Dazed and confused
    • #2
    • 11th Sep 17, 8:51 PM
    • #2
    • 11th Sep 17, 8:51 PM
    No.

    Tax relief can only be claimed in the current tax year and I think her contribution will be limited to £3,600 (which becomes a gross contribution of £4,500 with the basic rate relief the provider will add).

    Pension income doesn't count when working out how much can be paid into a pension.

    In years where she has lower or no earnings her contribution will be limited to £2,880 (which gets grossed up to £3,600 with the basic rate tax relief).

    This assumes she isn't in a pension scheme with her current employer.
    Last edited by Dazed and confused; 11-09-2017 at 8:54 PM.
    • maximumgardener
    • By maximumgardener 11th Sep 17, 9:01 PM
    • 249 Posts
    • 101 Thanks
    maximumgardener
    • #3
    • 11th Sep 17, 9:01 PM
    • #3
    • 11th Sep 17, 9:01 PM
    she can have a personal pension (or sipp) and can put her "earnings" into that (up to 40K) and get tax relief added in. however she cannot put the pension element in as thats not allowed .{ its not eligible earnings .....its a pension.}

    maybe HL can help get it set up and explain your options. they seem quite good at this level
    and you speak to real people
    • neil1960
    • By neil1960 11th Sep 17, 10:14 PM
    • 13 Posts
    • 4 Thanks
    neil1960
    • #4
    • 11th Sep 17, 10:14 PM
    • #4
    • 11th Sep 17, 10:14 PM
    thanks for the replies. I think I'm clear now.
    • Mnd
    • By Mnd 12th Sep 17, 8:29 AM
    • 121 Posts
    • 133 Thanks
    Mnd
    • #5
    • 12th Sep 17, 8:29 AM
    • #5
    • 12th Sep 17, 8:29 AM
    I'm in exactly the same situation and agree with the advice given above..
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