Would HMRC think this was lump sum recycling?

GenX0212

Pat38493 said:

NedS said:

Pat38493 said:

In any case the theoretical burden of proof is on HMRC to prove that you intended to recycle the money and it was pre-planned before you made any decisions and I suspect it would be pretty hard for them to prove.

The trouble with that is they only need to reasonably satisfy themselves when making that decision, and if you do not agree with the decision, you need to take HMRC to tribunal. Such decisions are usually made under the balance of probability - they consider it is more likely than not that you knew what you were doing, therefore it was pre-planned.

Obviously where a firm is offering advice or a scheme to recycle, it fits anyone's reasonable definition of pre-planned, but individual cases are far less clear cut.

Maybe - but according to another recent thread there has never been an individual case as HMRC has never levied a penalty on an individual.  However I doubt you would be able to prove that definitively.

As said in the first reply, there are plenty of people doing very similar things like this and none of them came back here saying that they had been penalized up to now.

I'm comfortable that I am not doing anything wrong. As linked in my original post, HMRCs own guidance states there is nothing wrong if this is done as part of normal retirement planning. I can easily show that the savings I would be using have been around for a few years at least and if worst came to worst could even link them back to bank accounts and from the bank accounts to PAYE deposits.
My question was to how likely HMRC would see it as an issue and thus cause inconvenience for me, it appears that the answer is very unlikely so I am happy with that.
Thanks to everyone who has replied.

GenX0212

BoGoF said:

GenX0212 said:

BoGoF said:

Just to be clear - is your £60k+ earnings net of any salary sacrifice?

I see nothing wrong with your proposal - lots of people max out contributions in the year before retirement. 

Are you thinking that I would be hitting the annual limit? If I pay in the £40k on top of my existing contributions I would be able to use the carry forwards rule if it goes above the annual limit as I would have £10-20k remaining allowance from each of the previous 2 years.

Assuming you have sufficient relevant earnings you can use carry forward. If your relevant earnings were £40k for example that ia the maximum you can get tax relief on regardless of any carry forward available.

£90k+ pre tax and deductions, £50k take home pay after tax and other deductions.  So as far as I am aware I can pay the £40k back into a pension. My total pension payments this year would then be approx £70k so £10k would be carry forward from a previous year. That's correct isn't it?