Pensions: tax rebate question

pboae

Is it possible for a higher rate tax payer to get their tax rebate back through IR, rather than having it credited straight into their pension?

EdInvestor

Yes if the pension is a Group personal pension - this is the way it's done.No if it's an occupational pension (AFAIK).

pboae

Thank you EdInvestor, what about stakeholder pensions or SIPPS?

What I really want to know is this: Is it possible to pay a lump sum into a pension for OH, get the 40% tax back, and pay that rebate into a pension for me and get another 22% back (either into my pension or directly).

So if he paid £10,000 in, got £4,000 back, I paid the £4,000 in and got £880 back. We'd end up with £10,000 in his pension, and £4,880 in mine; £14,880 from our initial investment of £10,000.

isasmurf

For tax relief purposes there are two types of private pension - Occupational pensions and Personal Pensions. Personal pensions includes Stakeholder Pensions, SIPPs, GPPs etc.

Occupational Pension contributions are deducted from your salary before tax is deducted, so as no tax has been paid no tax is repayable.

Personal Pension contributions are either made directly into the pension scheme yourself, or in the case of Group PPs/SHPs from your wages after tax has been deducted. In these cases the pension provider will automatically reclaim BR tax (22%) regardless of your tax status and pay it into your fund. HR taxpayers reclaim the extra 18% through SA, or their tax code.

So, in answer to your question it is not possible to reclaim the full 40% on your OHs contribution and stick it into yours. If it isn't an OP then you can onlly claim 18% back in cash.

pboae

Thanks isasmurf, oh well, it was worth a try