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What counts as income earned for SIPPs?
jordanjim
Posts: 68 Forumite
This is hopefully a nice easy question for someone to answer. What counts as 'earned income' for the purposes of pensions?
e.g. (assume no previous contributions to any schemes so no ability to roll over previous years' allowances), someone declares £45,000 on their tax return, made up of £30,000 PAYE, £5,000 P2P/interest, £10,000 private rental income profit. Ignoring any options of company pensions for the moment, is the maximum that can be paid into a SIPP £30,000 or do some/all of the other incomes count as well?
e.g. (assume no previous contributions to any schemes so no ability to roll over previous years' allowances), someone declares £45,000 on their tax return, made up of £30,000 PAYE, £5,000 P2P/interest, £10,000 private rental income profit. Ignoring any options of company pensions for the moment, is the maximum that can be paid into a SIPP £30,000 or do some/all of the other incomes count as well?
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Comments
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As a simple guide, I believe any income which is taxable on your self assessment counts."A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
I think only the £30k is allowable so that would be £24k net into the SIPP - assuming 20% tax rate.0
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No it isnt.I believe any income which is taxable on your self assessment counts.
Only "earned income" counts. Interest, rental income etc doesnt count.
In the example above only £30,000 counts. This is the gross amount - you subtract the tax from this and HMRC add it back on again.0 -
As a simple guide, I believe any income which is taxable on your self assessment counts.
No - relevant UK earnings only, so the £30,000 PAYE in the OP's case..
You can't count rental income, interest, pension income or dividends.I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.0 -
As a simple guide, I believe any income which is taxable on your self assessment counts.
Nope. Earnings are from employment or self-employment, but with the occasional exotic addition e.g. income from holiday lets.
The correct answer to the OP's question is westv's.Free the dunston one next time too.0 -
A list is available from HMRC at this link.0
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