Can you exceed SIPP salary cap with gross personal contributions?

aroominyork

A colleague working in Portugal (UK citizen, soon to be UK/Portuguese dual) works for a UK employer as a contractor and pays tax in Portugal; she has de-registered with HMRC. She wants to pay into a pension to receive an additional contribution from her employer (the same 10% it pays its UK staff) but the Portuguese system seems to have no viable private pension options. Can she pay into a SIPP as a gross personal contribution (not eligible for tax relief) despite it being over her £0 UK declared salary, and have the pension build up in the UK?

As I write this I realise that even if she could, she would be taxed twice on it: once when being paid the extra 10% before transferring it to a SIPP, and a second time when withdrawing from the SIPP (but would she be, if transferring it to Portugal?). Is there a solution? The employer uses Nest for its UK-based employees.

Jeremy535897

What an interesting question. The first question is whether a non-UK resident can pay into a SIPP. See:
https://myexpatsipp.elementor.cloud/sipp-for-non-uk-residents/

It is likely that your colleague would not be a "relevant person" and therefore any contributions would attract no tax relief. There is also the question of the annual allowance charge in section 227 FA 2004. This is designed to recover the tax benefit given on contributing to a scheme where tax relief is not due on the contribution due to, for example, an insufficiency of relevant earnings. I doubt anyone has ever checked whether this could apply to a non UK resident, but it would seem that if the charge applied, the deduction should cancel it out. I would ask the SIPP provider.