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SIPP Tax Relief Help
LULULU1
Posts: 462 Forumite
My wife (aged 49) is transferring a small DB Barclays pension into a SIPP, approx 20k, probably with AJ BELL.
She will also be paying £50 per month into the SIPP.
How does the tax relief work. Is it something she's does and if so when, is it paid in automatically, How does it work
Many thanks
She will also be paying £50 per month into the SIPP.
How does the tax relief work. Is it something she's does and if so when, is it paid in automatically, How does it work
Many thanks
0
Comments
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Tax relief at the basic rate is applied automatically. If your wife is a higher rate taxpayer, the extra relief is claimed through her tax return.0
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So does this mean her £50 each month will become £60 ?
Thanks0 -
No. It'll become £62.50 because 25% added is needed to get the effect of 20% being taken off the gross.0
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£50 paid in by your wife will give her £62.50
http://www.hl.co.uk/pensions/interactive-calculators/tax-relief-calculator0 -
Pensions contributions are considered to be gross. You then pay the net figure. So, you start at the higher and then deduct tax relief.
i.e. £62.50 is the pension contribution. The direct debt would be £50 net.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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