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Tax on lump sum
shug119
Posts: 70 Forumite
Hi, I am 66 and retired 3 months ago, I get state pension.
I have a pension pot with Fidelity, but I do not take any money from it. Can I put a lump sum into it and get tax relief on it. Cheers.
I have a pension pot with Fidelity, but I do not take any money from it. Can I put a lump sum into it and get tax relief on it. Cheers.
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Comments
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Quite probably, might be limited to £2,880 which is made up to £3,600 with tax relief but depends on your earnings (wages, self employment etc, not pension income) in the current tax year.0
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Only receiving state pension, no other income apart from some savings.
Top up pension income with savings.0 -
Hi, I am 66 and retired 3 months ago,
Does that mean you have earnings from April and May this tax year? If you do, and they were more than £3,600, you may be able to add more than the minimum mentioned above.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 -
Retired April 20th, receiving about £9700 per year pension. My Fidelity sipp is untouched. This is where I want to put some money , if tax relief.0
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You can invest £3,600 gross OR the value of your Earned Income, up to a maximum of (I believe £40,000) in each tax year.
If you retired on 20th April I imagine your earned income for this year is not more than £3,600 so that will be the limit.
You can put £2,880 into a SIPP and it will be grossed up by tax relief to £3,600.0 -
Contribute £2880 to your SIPP each tax year. Make sure to utilise your personal tax allowance each tax year by withdrawing from your SIPP an amount that, when added to your total earned income and pension income, comes to your PTA for that tax year. If you use a UFPLS, 25% of this withdrawal is tax free and 75% is taxable. So for example, for 18-19, if your total income was £11,100, you would pay no tax on a £1000 UFPLS because only £750 is taxable and your total earned and pension income including the UFPLS would be equal to your 18-19 PTA of £11850. The calculation in subsequent years would be simpler because you would have no earned income only pension income. Remember that once a tax year has gone you have lost that opportunity to maximise your tax free income.0
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Does 'earned income' in this context include savings income?No free lunch, and no free laptop
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No, nor BTL income, nor dividend income..Does 'earned income' in this context include savings income?
Hopefully someone will come along with a HMRC link that clarifies it..0
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