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Being Tax Efficient with Bonus
Options

Gareth77
Posts: 50 Forumite


in Cutting tax
If I get paid £132 + 25K bonus - what is are the best tax efficient decision I can make (I guess pension contributions are the best option)
Thanks everyone in advanced!
Thanks everyone in advanced!
0
Comments
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Hopefully you already had plans in place to mitigate the loss of your personal allowance on your existing £132k?0
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Depends on how much you income you want to retain. Initial thought would be to salary sacrifice below £100k to retain the persona allowance. Depending on your pension situation, there may be some mileage to SS'ing much further than this (claiming higher rate tax relief), if are expecting to be a basic rate tax payer in retirement or are not expecting to hit the LSA.
Know what you don't1 -
TheSpectator said:Hopefully you already had plans in place to mitigate the loss of your personal allowance on your existing £132k?
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What is LSA?0
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Lifetime saving allowance for pensions I would have thought.
How much are you and your employer currently putting into your pension and is it salary sacrifice?1 -
Gareth77 said:What is LSA?
https://www.gov.uk/tax-on-your-private-pension/lump-sum-allowance1 -
Hopefully your firm will allow you to salary sacrifice it, but if it's for this tax year it might be too late. When is the bonus being paid?
You could pay a substantial amount into a SIPP still in this tax year, note you can also use 3 previous year pension allowances so potentially you could put your entire high rate tax bit of your income into the pension (depending obviously on what you put into pensions in those previous years)1 -
best tax efficient option would be to donate it to charity, but that isn't the answer you were looking for1
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