Pension contribution unearned income (higher rate tax payer)

Dazed_and_C0nfused

Middle_of_the_Road said:

dharm999 said:

soulsaver said:

You put in £2880, platform claims £720 from HMRC = £3600.

As hrtp you'd need to claim the additional relief from HMRC. 

Can you claim additional relief if you have no earned income?  Apologies if a stupid question

Additional tax relief only applies to higher rate taxpayers.

If that were true there would be some unhappy Scottish intermediate rate taxpayers 😳

Dazed_and_C0nfused

dharm999 said:

Even if you have no earned income, by which I take to mean no relevant earnings for pension purposes?  The OP says they have unearned income.  I guess my question is if you have no relevant earnings can you still claim additional tax relief if you are a higher rate taxpayer?  I thought you couldn’t, but happy to be proven wrong, as that would help me.

A relief at source pension contribution, which is what is being discussed here, will extend your basic rate band by the amount of the gross contribution.

Not having any relevant earnings for pension purposes doesn't change that.  It just limits the gross contribution to £3,600 each tax year (whilst you are still young enough to be eligible to receive tax relief).

Dazed_and_C0nfused

EthicsGradient said:

dharm999 said:

Even if you have no earned income, by which I take to mean no relevant earnings for pension purposes?  The OP says they have unearned income.  I guess my question is if you have no relevant earnings can you still claim additional tax relief if you are a higher rate taxpayer?  I thought you couldn’t, but happy to be proven wrong, as that would help me.

With self-assessment, the way they implement higher rate tax relief is to increase the basic rate band size by your gross contribution (and, I suppose, in their internal calculation for everyone). I don't see why this wouldn't happen for the OP's case too.

There should be no difference between someone who happens to need to complete a tax return and someone who doesn't need to complete one.

It's just a bit simpler in Self Assessment as you are just adding a figure to a box on the return, not having to contact HMRC separately.