Pension carry forward rules (SIPP)

C_Mababejive

I had a read here but was unclear about a few things;
https://www.hl.co.uk/pensions/sipp/pension-carry-forward

Consider this scenario..

A person wishes to manage their tax liability for the tax year 2017/18.

They are employed and pay into a company pension scheme.

In the tax year 2017/18 the only pension contributions made were via the company pension scheme. The person did not have a SIP.

In 2017/18 the tax input for the company scheme did not exceed the allowances.

Could that person open a SIPP in the current tax year and carry forward the unused allowance from 2017/18 thus mitigating the overall tax situation for that year?

If so, would that all be handled on the 2017/18 tax return or are there other forms?

Thanks all

BoGoF

What type of company scheme is it?

It would depend on the earnings ( if any) in 18/19.

Some figures would help.

BoGoF

Also should have said that any SIPP payments in 18/19 has no bearing on 17/18 liability.

Triumph13

Yes you can. As long as you were a member of a pension scheme in 2017/18 you can carry forward unused allowance to 18/19 and use it in any pension scheme of your choice. You don't have to tell anyone that you've done it, just keep records in case HMRC ever challenge you in the future.

C_Mababejive

Triumph13 wrote: »

Yes you can. As long as you were a member of a pension scheme in 2017/18 you can carry forward unused allowance to 18/19 and use it in any pension scheme of your choice. You don't have to tell anyone that you've done it, just keep records in case HMRC ever challenge you in the future.

Right i have misunderstood but the mist is clearing !

So the person could make a SIPP contribution in the current 18/19 year carrying forward unused allowance from 17/18 but he couldnt enter that pension contribution on the 17/18 tax return as it wasnt made in that year and therefore the chance to mitigate the 17/18 overall tax position has been lost ??

OldMusicGuy

C_Mababejive wrote: »

So the person could make a SIPP contribution in the current 18/19 year carrying forward unused allowance from 17/18 but he couldnt enter that pension contribution on the 17/18 tax return as it wasnt made in that year and therefore the chance to mitigate the 17/18 overall tax position has been lost ??

Yes. You report the pension contributions in the tax year in which they were made to the pension scheme. You can effectively overcontribute in that year (ie more than 40K) if you have unused allowances from the three previous years.

Dazed_and_confused

And have high enough earnings in the year you are actually making the payment in.

It is this bit a lot of posters seem to miss

BoGoF

Added complication is that if the company scheme is defined benefit//final salary then it is not simply a case of taking the employee contributions from the annual allowance. The 'input' value will be higher.

C_Mababejive

OK thanks all,so the bottom line is that you cant apply a carried over allowance which is paid in the 18/19 year,to the tax year 17/17 and thus retrospectively claim tax relief in the 17/18 year..