Retirement plan - non tax earning spouse

Dazed_and_C0nfused

NannaH said:

If he’s aready had it as a HR tax payer though- he will have to pay it back?   

Not at all, each tax year is looked at separately so if the pension contributions are sufficient to avoid a liability to higher rate tax when HMRC review the year next summer there won't be a problem.

Obviously HMRC would need to be informed of the pension contributions before they review 2022:23 otherwise the op would be ineligible and would have to persuade their spouse to apply again (for 2022:23) after advising HMRC of the pension contributions.

concernedpharmacist

No worries. Dazed has it correct. 

I haven't yet been a higher rate tax payer, and my strategy is to avoid being one am allowing a margin so as not to tip over into higher rate. 

concernedpharmacist

Could you confirm?
My wife earns £10,000 per year. (assume she has no workplace pension).

She has set up a new personal pension with Vanguard with tax relief at source.

I believe she can get tax relief on up to 100% of her pensionable pay;

 but does this mean that she can pay all £10k into the scheme (resulting in total £12,500 after tax relief).

Or is she limited to a £8k maximum (total £10k) without overclaiming tax relief?


Thanks

JoeCrystal

The latter.

concernedpharmacist

OK.  That's what I suspected 

Thanks