Pension contribution to lower tax liability

weimo

Dazed_and_confused wrote: »

If you make a gross relief at source contribution of £9k the £59,000 (with dividends making up £5k of the £59k) would be taxed,

Personal Allowance £12,500 - no tax

Leaves £46,500 to be taxed

£41,500 x 20% (basic rate)
£2,000 x 0% (dividend nil rate using up some of the basic rate band)
£3,000 x 7.5% (dividend basic/lower rate using up the rest of the basic rate band)

This was my desire that it would work out like this. Thank you for the clarification.