Teachers Pension and buying additional years

lanclass_2

In my case, £1k of additional pension would cost approx. £14200. Can someone tell me if I am able to claim tax relief on this payment and how this is done? Thanks

jem16

lanclass wrote: »

In my case, £1k of additional pension would cost approx. £14200. Can someone tell me if I am able to claim tax relief on this payment and how this is done? Thanks

Yes you can claim tax relief on this payment provided that amount plus your normal contributions are less than your gross salary.

If you are paying with a lump sum you will have to contact HMRC to claim the tax relief which isn't always easy. You will need to ensure that you tell them that this is a lump sum payment made to a defined benefit scheme and is paid gross with no tax relief given.

fizio

jem16 wrote: »

Presumably you mean £15k for each £1k of pension with a maximum of £6k annually?

that is indeed what I meant

fizio

jem16 wrote: »

Yes you can claim tax relief on this payment provided that amount plus your normal contributions are less than your gross salary.

If you are paying with a lump sum you will have to contact HMRC to claim the tax relief which isn't always easy. You will need to ensure that you tell them that this is a lump sum payment made to a defined benefit scheme and is paid gross with no tax relief given.

I may also give this a go but for my OH it was 3 years ago when she last earnt income over tax threshold so I will have to see if the 3 year pension tax relief rule applies in this case. She only paid a couple of grand in tax but worth seeing if she can get some of it back - won't hold out much hope though.

jem16

haf63 wrote: »

I may also give this a go but for my OH it was 3 years ago when she last earnt income over tax threshold so I will have to see if the 3 year pension tax relief rule applies in this case.

There's no such thing as a 3 year pension tax relief rule. There is a 3 year Annual Allowance rule where you can use unused allowance from previous years but this is nothing to do with tax relief. This is only to allow you to pay in more than the current £50k Annual allowance.

Tax relief is limited to the tax year in which you make the contribution and also limited to 100% of earned income. So if you make the contribution in tax year 2013/14, it's her earned income in this tax year that counts.

fizio

jem16 wrote: »

There's no such thing as a 3 year pension tax relief rule. There is a 3 year Annual Allowance rule where you can use unused allowance from previous years but this is nothing to do with tax relief. This is only to allow you to pay in more than the current £50k Annual allowance.

Tax relief is limited to the tax year in which you make the contribution and also limited to 100% of earned income. So if you make the contribution in tax year 2013/14, it's her earned income in this tax year that counts.

Thanks for clarifying and luckily I wasn't exepcting a result from prior years tax..