Aged in 80s - £720 Annual Pension TaxRelief ??

[Deleted User]

Hello everyone

I think I've missed a trick for my Dad.....given his circumstances below.

Can he contribute £2880 into a SIPP to bag annual £720 in tax relief?  He certainly has the spare income to do it. 

I'm thinking Interactive Investor friends family discounted SIPP so minimal admin cost.  Dad could either hold in cash  as the the 720 helps negate inflation) or invest in a suitable fund (?any ideas re criteria to consider?)  He is unlikely to need to access/drawdown from the proposed SIPP.

Is there any rule that revents this.....I can't see that it would be ensign recycling as such nor am I aware of an age limit.....other than the LTA test at 75.

If this is a good idea, I assume one can only use current year entitlement and not 3 previous years?

My widowed father in his 80s retired in 1998 at 65 years.  He receives full state pension and various workplace pensions resulting in a monthly pension income surplus of £800 which he receives nett after basic income tax has bben deducted.  Non State Pension income is c£800 (annuities)...so nowhere near LTA although I've never calculated it as Dad retired in 1998.

Dad gifts the max £3000 to me annually via a £250 DD monthly.

His assets are:

£70k Rainy Day savings across a bank eSaver 2.75% and Premium Bonds.

£25K SS ISA

£250K Offshore Investment Bond.  Held since 2014.  Dad is entitled to withdraw 5% annually with a deferred tax charge but has made no withdrawals since 2016.

His home is a mortgage free bungalow c£300k and owned 50/50 with me (only child).  His share is in a lifetime settlement trust with Dad and being the sole Trustees.  My share was inherited from my darling mum.

Dad has both health and finance POAs and Will in place.

Thanks

molerat

Pension contributions after age 75 are not eligible for tax relief.

Dazed_and_C0nfused

I think he can contribute to a pension if he really wants to but his age prevents him from getting any tax relief.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm041000

[Deleted User]

Thanks everyone....I note that no tax relief is claimable after age 75.....which was our sole aim.

I'll tell Dad to keep enjoying his retirement.

dunstonh

I think I've missed a trick for my Dad.....given his circumstances below.

You have.  He was age 75 in 2008.   That was the last year he could pay into a pension.

It should be noted that whilst it is theoretically possible to pay into a pension after your 75th birthday (and not obtain tax relief), nearly all mainstream providers will not allow it.     HMRC will also take an interest in the size of the contributions in case there is IHT evasion going on.

Albermarle

mulberryellie said:

Thanks everyone....I note that no tax relief is claimable after age 75.....which was our sole aim.

I'll tell Dad to keep enjoying his retirement.

He seems to be in a good position financially to do that, which is good , so can manage without the £720  

Marcon

dunstonh said:

I think I've missed a trick for my Dad.....given his circumstances below.

You have.  He was age 75 in 2008.   That was the last year he could pay into a pension.

It should be noted that whilst it is theoretically possible to pay into a pension after your 75th birthday (and not obtain tax relief), nearly all mainstream providers will not allow it.     HMRC will also take an interest in the size of the contributions in case there is IHT evasion going on.

There is a way to obtain tax relief after the age of 75, albeit in a roundabout way: employer contributions. These aren't a taxable benefit to the employee, and the employer can claim corporation tax relief provided they meet the usual requirements of being proportionate in respect of the employee to whom they relate.