MPAA - Tax relief included?

dunstonh

However with the limit shrinking to £4k I'm assuming that salary sacrifice has to be calculated to ensure that it is no more than £4k - employer contribution? Or am I missing something here? 

Whether it is employer or employee contributions doesn't matter.  Its the total of both that matters

Thrugelmir

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

pensionpawn

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

Dazed_and_C0nfused

pensionpawn said:

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

Salary sacrifice means there is no personal (employee) contribution.

Marcon

pensionpawn said:

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

If he triggers MPAA, same answer as before: total contributions whether made personally (plus any tax relief), or by the employer (whether via salary sacrifice or a straightforward employer contribution), are limited to £4,000 per annum. The MPAA is triggered from the day you trigger it (i.e. contributions made earlier in the tax year aren't subject to the MPAA, so if you're planning to make hefty contribution, do so before triggering the MPAA).

pensionpawn

Dazed_and_C0nfused said:

pensionpawn said:

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

Salary sacrifice means there is no personal (employee) contribution.

So you are saying that a salary sacrifice of £4k5, or £10k, £30k would not trip a tax alarm after triggering MPAA?

dunstonh

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

What personal contribution?  Are you talking about an additional amount on top of the salary sacrificed amount?

zagfles

pensionpawn said:

Dazed_and_C0nfused said:

pensionpawn said:

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

Salary sacrifice means there is no personal (employee) contribution.

So you are saying that a salary sacrifice of £4k5, or £10k, £30k would not trip a tax alarm after triggering MPAA?

What??? He's saying "Salary sacrifice means there is no personal (employee) contribution." The clue is in those words. He said nothing about not tripping tax alarms.

What is it you're finding so hard to understand? Once the MPAA is triggered, total gross DC contributions including employer, sal sac, employee, SIPP etc can't exceed £4k. If they do, there's a tax charge.

pensionpawn

Marcon said:

pensionpawn said:

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

If he triggers MPAA, same answer as before: total contributions whether made personally (plus any tax relief), or by the employer (whether via salary sacrifice or a straightforward employer contribution), are limited to £4,000 per annum. The MPAA is triggered from the day you trigger it (i.e. contributions made earlier in the tax year aren't subject to the MPAA, so if you're planning to make hefty contribution, do so before triggering the MPAA).

Ah, didn't see your post before I replied to Dazed and Confused. So, what happens if by triggering MPAA an employee has to reduce their salary sacrifice below the minimum level stipulated by the company scheme? I suppose they would have to leave the scheme?

zagfles

pensionpawn said:

Marcon said:

pensionpawn said:

Thrugelmir said:

pensionpawn said:

xylophone said:

https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-annual-allowance

The £4000 is gross - you would contribute £3200 and the provider would claim tax relief of £800.

Or am I missing something here? 

Dredging up an old thread perhaps. 

Yes it's not current however it cropped up when I searched for tax relief / triggering MPAA / employers contribution. Thought I'd search before starting a new thread.

Trying to find the answer to a situation like person A earns £45k and is a member of his firms DC pension. His employer matches contributions up to 10%. What happens to his personal £4k5 contribution via salary sacrifice if he triggers MPAA? 

If he triggers MPAA, same answer as before: total contributions whether made personally (plus any tax relief), or by the employer (whether via salary sacrifice or a straightforward employer contribution), are limited to £4,000 per annum. The MPAA is triggered from the day you trigger it (i.e. contributions made earlier in the tax year aren't subject to the MPAA, so if you're planning to make hefty contribution, do so before triggering the MPAA).

Ah, didn't see your post before I replied to Dazed and Confused. So, what happens if by triggering MPAA an employee has to reduce their salary sacrifice below the minimum level stipulated by the company scheme? I suppose they would have to leave the scheme?

Or stay in and declare & pay the AA excess charge on your tax return. This could be a better option than losing out on employer conts. But obviously you have to do the sums.