Junior SIPP and carry forward rules

sgebbie

Hi

my 4 year old has a junior sipp (opened Nov 2020) and he regularly gets £100 deposited each month since 2020.

I'd like to make a contribution of £3600 today, can he use the unused amount from the last 3 years as a 'carry forward' so that all his 2024 deposits get tax relief and the additional 25% from government?

eg.

2021 he deposited £1,200net  and received £300 from government. (total £1500)

2022 he deposited £1,200net  and received £300 from government. (total £1500)

2023 he deposited £1,200net  and received £300 from government. (total £1500)

for each of those years if he was allowed to deposit £3600(gross) can he use the £2,100 unused allowance (£3600-£1500) from each year, meaning I could theoretically deposit £6300 into his account with tax relief?

if so, do I need to do anything or does hmrc realise what is happening

edit. I just found a post that the £3600 doesnt have carry forwards...is that a blanket rule, it doesnt carry forward & makes no difference if you are 4yo or 54year old?

hopeully that makes sense.

thanks

HappyHarry

Carry forward can only be used if you have already used this years annual allowance of £60,000. 

dunstonh

edit. I just found a post that the £3600 doesnt have carry forwards...is that a blanket rule, it doesnt carry forward & makes no difference if you are 4yo or 54year old?

There is no such thing as a Junior sipp apart from marketing. So, rules for 4 year olds are the same as 54 year olds.

Carry forward either needs company contributions (e.g. company director) or £60k+ earnings.

The CF rules require you to utilise the current year annual allowance of £60k in full first before you can carry forward.

zagfles

Carry forwards applies to the annual allowance not the tax relief limit. The tax relief limit is £3600/100% of earnings, there is NO carry forwards for this. As explained here every week. So a non earner can only get tax relief on a £2880 net contributions making it £3600 gross. 

Malale

Yes, your son can use unused tax carryover benefits to contribute additional funds to his Junior ISA. This means that if you haven't used your maximum annual contribution in previous years, you can make an additional contribution to account for any unused benefits. HMRC automatically takes this into account so you don't need to do anything extra.

HappyHarry

Malale said:

Yes, your son can use unused tax carryover benefits to contribute additional funds to his Junior ISA. This means that if you haven't used your maximum annual contribution in previous years, you can make an additional contribution to account for any unused benefits. HMRC automatically takes this into account so you don't need to do anything extra.

This is entirely wrong.

Neither unused ISA allowances or SIPP allowances can be carried forward to another tax year with the exception of the SIPP carry forward rules mentioned in posts above.