Paying a lump sum into my pension

elcaminante

I want to pay a lump sum into my SIPP in addition to my usual contributions from salary. My monthly contributions from salary receive automatic tax relief, paid into my pension by the provider. How does it work with tax relief on the lump sum? Is it also paid automatically or do I have to claim it from HMRC?

xylophone

If you make a lump sum contribution to your SIPP, the the provider will claim basic rate tax relief - if you are a higher rate tax payer, you will need to claim any additional relief due by contacting HMRC.

Dazed_and_confused

Assuming your current payments are into a "relief at source" scheme where the pension company (courtesy of HMRC) add the 25% uplift then the same should happen with any additional contributions which are eligible for tax relief.

You should only need to involve HMRC if you are due additional relief i.e. you are paying 21%, 40%, 41%, 45% or 46% tax.

AnotherJoe

elcaminante wrote: »

I want to pay a lump sum into my SIPP in addition to my usual contributions from salary. My monthly contributions from salary receive automatic tax relief, paid into my pension by the provider. How does it work with tax relief on the lump sum? Is it also paid automatically or do I have to claim it from HMRC?

In your case, where you presumably have a standing order or dd to pay into your SIPP, theres no difference between your monthly contributions and a lump sum. They will be treated the same. As said if you are above the 40% threshhold you also inform HMRC of the gross amount, eg you pay in £80, made up to £100, you tell HMRC you paid £100, they give you £20 back.

westv

elcaminante wrote: »

I want to pay a lump sum into my SIPP in addition to my usual contributions from salary. My monthly contributions from salary receive automatic tax relief, paid into my pension by the provider. How does it work with tax relief on the lump sum? Is it also paid automatically or do I have to claim it from HMRC?

You might also need to provide ID when paying in the lump sum. A previous employer of mine mentioned this point in their instructions as to how to pay in a lump sum. Maybe the rules have changed since then though?