SIPP maximum annual investment allowed ?

zagfles

sebthered wrote: »

quote 'The OP has already stated their earnings, which are lower than the Annual Allowance, so carry forward does not apply in this case.' unquote

Don't understand what you are saying here? he is entitled to carry forward !

The OP is constrained by the tax relief limit, ie 100% of relevant earnings, which can't be carried forwards.

He could pay in more than £15k but he wouldn't get tax relief on anything over £15k, which usually makes it pointless as he'd likely pay tax on the way out without getting relief on the way in.

sebthered

The OP is constrained by the tax relief limit, ie 100% of relevant earnings, which can't be carried forwards.

He could pay in more than £15k but he wouldn't get tax relief on anything over £15k, which usually makes it pointless as he'd likely pay tax on the way out without getting relief on the way in.

but if for arguments sake he has earned say £15k for each of the last three years (and has held a pension during that time) then surely he is able to make a payment of £48k and gain his 20% uplift ...?

zagfles

sebthered wrote: »

The OP is constrained by the tax relief limit, ie 100% of relevant earnings, which can't be carried forwards.

He could pay in more than £15k but he wouldn't get tax relief on anything over £15k, which usually makes it pointless as he'd likely pay tax on the way out without getting relief on the way in.

but if for arguments sake he has earned say £15k for each of the last three years (and has held a pension during that time) then surely he is able to make a payment of £48k and gain his 20% uplift ...?

No. Read my first sentence again. It's only the AA that can be carried forwards, not the tax relief limit.

anselld

sebthered wrote: »

but if for arguments sake he has earned say £15k for each of the last three years (and has held a pension during that time) then surely he is able to make a payment of £48k and gain his 20% uplift ...?

No. If he has earned 15k he can contribute £15k. As others have stated already the relevant earnings limit does not carry forward.

jamesd

sebthered wrote: »

but if for arguments sake he has earned say £15k for each of the last three years (and has held a pension during that time) then surely he is able to make a payment of £48k and gain his 20% uplift ...?

The past years are irrelevant for earnings. You cannot ever carry forward past earnings, only past unused annual allowance.

It used to be possible many years ago but no longer.

sebthered

Thanks for that clarification, I was on the verge of using carry forward in order to invest £70k in savings thinking that tax relief would apply to each of the past three years. Clearly this cunning plan now makes no sense!

robin61

sebthered wrote: »

Thanks for that clarification, I was on the verge of using carry forward in order to invest £70k in savings thinking that tax relief would apply to each of the past three years. Clearly this cunning plan now makes no sense!

I am doing something similar at the moment. It will take me two years to get the amount I want to invest into my SIPP due to not being able to exceed my income. Could you do something over two or more years depending on what your current income is ?

Fermion

If you are self employed via a limited company then your company "employer" can invest unlimited amounts

But you don't get tax relief on employer contributions (however you don't pay corporation tax)

jamesd

And provided you disclose any amount over the annual allowance and any available allowance carry-forward from all pension contributions to pensions in your name to HMRC so that they can charge you the annual allowance charge on that excess. If you don't disclose it'll probably take two to three years for HMRC to put the pension contribution information together and tell you to fill in a tax return with the information.

sebthered

"I am doing something similar at the moment. It will take me two years to get the amount I want to invest into my SIPP due to not being able to exceed my income. Could you do something over two or more years depending on what your current income is ?"

I will probably feed it in over the next 3-4 years, and eke out the best savings home for it during this process.