Who can pay into a SIPP?

dunstonh

I can see that the best option for maximizing the contributions is to become a director shareholder and receive company pension contributions.

Yes.  That is why you see so many limited companies with husbands and wives as shareholding directors.   Plus, you get two basic rate bands to use up before you pay higher rate.

Would carry forward be permitted (£40,000 unused annual allowances from the three previous tax years, starting with the earliest)? 

Yes, if she has a historic pension from that is at least 3 years old.  CF doesn't have to use that historic pension but a historic pension must exist.

The rules on carry forward say you must have "had a pension" in each of the years you want to carry forward from. Does having opened a SIPP 3 years ago, but having never made any contributions into it, still meet that criteria?

I suspect the answer would be no as no contribution to a pension scheme would have been registered.  However, if they have been sending out an annual statement showing a nil balance then it is possible that they did activate it.   Often the setting up only goes so far and the pension itself is only activated when the money goes in.      

If you opened the SIPP and made the maximum non-earners contribution £2,880 (grossed up to £3600) in some years, for those years is the available carry forward for the directors pension contribution £36,400 (£40,000 - £3600)?

The whole £160k is potentially available minus gross contributions made in those years.  The only time earnings in past years come into play is with high earners subject to tapering (so, not this scenario)

Can you take up carry forward for the previous 3 years unused allowances even if you were not a director/shareholder during the those earlier years?

yes

The £40,000 p.a. limit, is that for the period covering the UK tax year to April, or the company's accounting tax period?

In the period in question, yes it is (there was a time when it didn't necessarily mean that but not in your case)

kerrick

Thanks dunstonh, very helpful. 

zagfles

You need to be discussing all this with your accountant rather than us. You're not so much asking pension questions but company accounting questions. If having your spouse as a director is a good idea why has the accountant not recommended it already - there are tax advantages regardless of pension contributions for instance having two tax allowances etc