Extra Pension Payments

martindias

My company pension is already in drawdown, I am 67 yrs, but I would like to make further payments into my SIPP which I hope will provide a pension supplement in my late 70s. I know I’m now limited to £4000 additional annual payments but it’s not clear whether this includes the government tax rebate. So is it £4000 plus what I’ve already paid in tax? If the allowable payments includes the government tax back how do I work out exactly the amount I can pay in?

Andrew31

Its £4000 gross i.e you can pay £3200 and £800 Tax relief at source.   Assuming you have relevant income of more than £4000, if not its £3600 or £2880 net!

Albermarle

Assuming you have relevant income of more than £4000, if not its £3600 or £2880 net!

Just for clarity 'relevant income ' basically means taxable  earnings, but does not include pension income, even though it is taxable.

martindias

yes - the 'taxable income' will be dividends and sales of stocks and shares.

Many thanks

xylophone

Income from dividends, share sales, asset sales etc may be taxable in one way or another but in terms of tax relief on pension contributions, you need to look  at relevant earnings.
See 
https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/tax-relief-members-contributions/
It’s sometimes easier to think about what are not relevant earnings and this includes pension income, dividends and most rental income.
If you do not have any relevant earnings, you are limited to a net contribution of £2880 - the pension provider will claim TR of £720 and add it to your pension.

Linton

martindias said:

yes - the 'taxable income' will be dividends and sales of stocks and shares.

Many thanks

Dividends and sales of stocks & shares do not count as earned income so you will be limited to contributions of £3600 gross/ £2880 net.

martindias

Linton said:

martindias said:

yes - the 'taxable income' will be dividends and sales of stocks and shares.

Many thanks

Dividends and sales of stocks & shares do not count as earned income so you will be limited to contributions of £3600 gross/ £2880 net.

Oh !!!!!! - i've already added the £3800. if i haven't added any last year can i bring the 'allowance forward?

xylophone

Ask your provider about a refund of excess contributions?