Maximum pension contribution and EIS

MoneySavingUser

Just wondering if the following is possible.

Per the Hargreaves Lansdown website:

If you're a UK resident under the age of 75, the general rule is you can contribute to all your pensions as much as you earn and receive tax relief each tax year. For example: If you earn £35,000, you should be able to contribute £35,000 gross to your pension. The payment you make will be £28,000, to which the taxman will automatically add basic-rate (20%) tax relief of £7,000.

Someone on £35k per annum would pay the following tax:

Salary £35,000
Less personal allowance (£11,000)
Taxable £24,000
Tax due@20% £4,800

1. So this person would pay £4,800 of tax but be able to get £7,000 of tax relief - is this correct?

2. Assuming that is correct could this person then also make EIS investments of £10,000 and get the 30% tax relief on that deducted from the £4,800 thus effectively being in a net benefit position e.g.

Tax paid £4,800
Tax relief received on pension (£7,000)
Tax relief on EIS (£3,000)
Gain £5,200

Whilst obviously you would need the cash to be able to do this it does seem quite generous.

bigadaj

simple answer is yes and no.

You would qualify for the full 20% tax relief on contributions to a pension.

However I believe the eis relief is restricted to tax paid in that year, it is for vct investments, so you can't double dip and get tax relief on tax you haven't paid.