Pension Contributions Non -Taxpayer

Mothman

Does anyone know if the current tax relief limit on pension contributions for non-taxpayers ( £2880 net, £3600 gross) will change for the 2016/17 tax year?

Thanks

jem16

Haven't seen any change mentioned and it's not changed for years so not expecting it.

greenglide

Technically it is not for "non tax payers" it is for people whose earnings are less than this. It is, after all, possible to pay tax on earnings less than £3,600 but you still get the £3,600 allowance.

Mothman

OK thank you for the clarification. Just wanted to find out in case my wife who is retired, needed to amend the contrbutions to her stakeholder pension for the next tax year.

PensionTech

Just wanted to find out in case my wife who is retired, needed to amend the contrbutions to her stakeholder pension for the next tax year.

Is she currently drawing a pension? If so, how much?

Mothman

My wife is retired and currently has zero income as she has deferred her State Pension and has no occupational pension. Her stakeholer pension was opened last year and she is currently contributing £2880 pa to get the £720 tax releif.

itm2

greenglide wrote: »

Technically it is not for "non tax payers" it is for people whose earnings are less than this. It is, after all, possible to pay tax on earnings less than £3,600 but you still get the £3,600 allowance.

I have a question in relation to this: I am currently semi-retired, and have started drawing down on my SIPP while at the same time generating a small amount of income (about £1k in the current tax year).

I would like to reinvest into a SIPP, but am not sure what the maximum amount of tax relief I can get on my SIPP contributions. Is my "relievable" contribution limited by my income (£1k), or by the £3,600 allowance?

greenglide

The limit is the £3,600 gross figure which is, of course, £2,880 net.

Everyone gets this as a minimum if they do not have relevant income.

itm2

greenglide wrote: »

The limit is the £3,600 gross figure which is, of course, £2,880 net.

Everyone gets this as a minimum if they do not have relevant income.

As I have "relevant income" of £1,000, does this mean I will only get tax relief on SIPP contributions of up to £1,000?

dunstonh

The rules on this were introduced in 2001 and have not changed since.

You can contribute up to £3600 a year into a pension irrespective of what you earn

itm2

dunstonh wrote: »

The rules on this were introduced in 2001 and have not changed since.

You can contribute up to £3600 a year into a pension irrespective of what you earn

Does that mean that tax relief would be applied to all of the £3600 contribution? (i.e. contribute £2,880 and get it topped up to £3,600 by HMRC?).

I remember reading somewhere that the maximum relief available was up to the lower of £3,600 or your earned income (but can't remember where I read it).