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pension contribution from redundancy
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simonfitba
Posts: 176 Forumite

Quick question:
I have directed part of my redundancy payment into my pension. This money wasn't taxed, so am I right in thinking it won't be grossed up by 20% when it hits the pension.
Thanks in advance.
I have directed part of my redundancy payment into my pension. This money wasn't taxed, so am I right in thinking it won't be grossed up by 20% when it hits the pension.
Thanks in advance.
0
Comments
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What do you mean it wasn't taxed? Was it part of the £30k tax free redundancy pay?
And how was it directed into your pension - did you ask your employer to pay it straight in?
The usual thing is that you keep the tax free element of the redundancy and ask your employer to put some or all of the taxable part into the pension. You get tax relief (effectively) by not having to pay tax on it becuase it's gone into the pension not to you. Therefore no tax relief can be claimed.
If you've put the tax free part into the pension there might be issues with the 100% of relevant earnings rule, as the tax free part doesn't count as relevant earnings.0 -
Cheers Zagfles, that's what I thought.
It wasn't part of the £30k tax-free sum. I asked my employer to make the payment, which would have been taxable, straight into my pension.
Next question: Will this payment need to be mentioned when it comes to Self-Assessment? Don't want to the taxman to think I'm trying to claim the relief.0 -
simonfitba wrote: »Cheers Zagfles, that's what I thought.
It wasn't part of the £30k tax-free sum. I asked my employer to make the payment, which would have been taxable, straight into my pension.
Next question: Will this payment need to be mentioned when it comes to Self-Assessment? Don't want to the taxman to think I'm trying to claim the relief.0
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