pension lump sum into sipp

thebullsback

could I put money from my nhs pension lump sum into a sipp and if yes would it qualify for a top up off the tax man?

Dazed_and_confused

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/pension-lump-sum-recycling

Might help.

And don't forget the income limits would still apply. So lump sum in one tax year and SIPP contribution in another would be something to take account of (if you are no longer earning).

thebullsback

So the way I read it I could put say £10000 of my lump sum into a Sipp with no problem and would the Tax man also top my Sipp contribution up?

Brynsam

thebullsback wrote: »

So the way I read it I could put say £10000 of my lump sum into a Sipp with no problem and would the Tax man also top my Sipp contribution up?

I think you're misreading it. You can put any amount into your SIPP, but the maximum you could contribute and get the tax top up is £7,500 unless you are already paying significant sums into your SIPP - doesn't sound as if you are.

thebullsback

your right Brynsam but £7500 sounds good to me.

Dazed_and_confused

How much will you be earning in wages/salary (not pension income) in the tax year you are making the contribution?

pensionpawn

Yes £7500 is the maximum TFLS that can be taken to guarantee recycling has not taken place. Any TFLS amount above £7500 will be penalised by recycling rules unless the increase in contributions is less than 30%

cloud_dog

pensionpawn wrote: »

Yes £7500 is the maximum TFLS that can be taken to guarantee recycling has not taken place. Any TFLS amount above £7500 will be penalised by recycling rules unless the increase in contributions is less than 30%

...of the PCLS.

Therefore if the PCLS was £50k, up to £15k (30%) could be deposited without breaking the rule?

thebullsback

i intend to retire and return to the same job salary will be £20795.
Pension £5344 PA and lump sum£36000.

pensionpawn

Related question. Person A quits work on their 55th birthday, lets say 30th Sep, half way through the tax year. Lets say that by then they have earned income of £16k from their job and have contributed 20% of that into their pension (half of which would have benefited from tax relief) and £1200 via AVCs (also topped up via tax relief). Approx £5k1 into their pension. The question is would someone else be allowed to top up that persons pension contributions for the year to their income for the current tax year, £16k, or would that now not be possible as they are no longer employed? Cheers.

AlanP_2

You can contribute up to your earned income level overall so yes.

Take off "employed" contributions then pay 80% of the balance to your provider who will claim the tax relief element for you.

Check the Money Purchase Annual Allowance as that may come in to force as soon as you take any taxable income from a Dc scheme. If it does make your contribution BEFORE any withdrawal.