SIPP Tax Relief Question

zooks

Please could somebody answer what might be a stupid question about my wifes SIPP?

She's a PAYE employee earning less than £25k so a basic rate taxpayer.

For the last 3yrs she has been paying £500/mth into a Quilter SIPP managed by a FA.

Her pension account shows the current value only based on what she has paid in less management fees.

My question is how would she expect to get the 20% tax relief?

Would extra funds be added directly to her pension by HMRC or do they allow her to earn more taxible income so the £500 is pays in is actually costing her less?

Her tax code is currently 1257L

Thanks

Dazed_and_C0nfused

zooks said:

Please could somebody answer what might be a stupid question about my wifes SIPP?

She's a PAYE employee earning less than £25k so a basic rate taxpayer.

For the last 3yrs she has been paying £500/mth into a Quilter SIPP managed by a FA.

Her pension account shows the current value only based on what she has paid in less management fees.

My question is how would she expect to get the 20% tax relief?

Would extra funds be added directly to her pension by HMRC or do they allow her to earn more taxible income so the £500 is pays in is actually costing her less?

Her tax code is currently 1257L

Thanks

It should be added by the pension company (who in turn get the money from HMRC).

There is no personal tax saving for someone in her situation, the tax benefit is all from pension tax relief.  There would be no impact on her tax code.  An

If she is paying £500/month then £125/month should be being added (possibly several weeks later).

Is she definitely paying these contributions herself?

zooks

Dazed_and_C0nfused said:

zooks said:

Please could somebody answer what might be a stupid question about my wifes SIPP?

She's a PAYE employee earning less than £25k so a basic rate taxpayer.

For the last 3yrs she has been paying £500/mth into a Quilter SIPP managed by a FA.

Her pension account shows the current value only based on what she has paid in less management fees.

My question is how would she expect to get the 20% tax relief?

Would extra funds be added directly to her pension by HMRC or do they allow her to earn more taxible income so the £500 is pays in is actually costing her less?

Her tax code is currently 1257L

Thanks

It should be added by the pension company (who in turn get the money from HMRC).

There is no personal tax saving for someone in her situation, the tax benefit is all from pension tax relief.  There would be no impact on her tax code.  An

If she is paying £500/month then £125/month should be being added (possibly several weeks later).

Is she definitely paying these contributions herself?

They are allocated from her wage but paid from our joint account. I already draw a workplace DB pension paid into the same account. Would this affect her tax relief?

Dazed_and_C0nfused

zooks said:

Dazed_and_C0nfused said:

zooks said:

Please could somebody answer what might be a stupid question about my wifes SIPP?

She's a PAYE employee earning less than £25k so a basic rate taxpayer.

For the last 3yrs she has been paying £500/mth into a Quilter SIPP managed by a FA.

Her pension account shows the current value only based on what she has paid in less management fees.

My question is how would she expect to get the 20% tax relief?

Would extra funds be added directly to her pension by HMRC or do they allow her to earn more taxible income so the £500 is pays in is actually costing her less?

Her tax code is currently 1257L

Thanks

It should be added by the pension company (who in turn get the money from HMRC).

There is no personal tax saving for someone in her situation, the tax benefit is all from pension tax relief.  There would be no impact on her tax code.  An

If she is paying £500/month then £125/month should be being added (possibly several weeks later).

Is she definitely paying these contributions herself?

They are allocated from her wage but paid from our joint account. I already draw a workplace DB pension paid into the same account. Would this affect her tax relief?

I have no idea what you mean by that.

What is per P60 going to show her income as, ~£25k or ~£19k

squirrelpie

zooks said:

For the last 3yrs she has been paying £500/mth into a Quilter SIPP managed by a FA.

Does Quilter offer a SIPP? I can't see any mention of it on their web site. Who/what is the FA? Something is very definitely wrong if there is no tax relief being added, and also the money should be being invested in something.

GrumpyDil

Is it possibly being paid by salary sacrifice?

dunstonh

My question is how would she expect to get the 20% tax relief?

Quilter pre-funds the tax relief. So, its instantly there on contribution.

Her pension account shows the current value only based on what she has paid in less management fees.

As do all.

They are allocated from her wage but paid from our joint account. I already draw a workplace DB pension paid into the same account. Would this affect her tax relief?

That is a confusing statement.   
What is this allocation from her wage you are referring to?  Is it an employer contribution?   If so, why is it being paid into your joint account and not paid by the employer?

Does Quilter offer a SIPP? I can't see any mention of it on their web site. Who/what is the FA? Something is very definitely wrong if there is no tax relief being added, and also the money should be being invested in something.

Yes they do.   Quilter also have their own salesforce.  
As Quilter pre-fund tax relief, they would just show the gross contribution on the transaction history.    Unless somehow the scenario involves an employer contribution.   That would also be gross but no tax relief payable.

Is it possibly being paid by salary sacrifice?

That could be one reason, but that wouldn't work if the money ends up in the OP's joint account before being made to the pension.

badmemory

An FA not an IFA??

Triumph13

Are you sure the amount leaving your joint account each month is £500 not £400 ?

bjorn_toby_wilde

badmemory said:

An FA not an IFA??

Not necessarily. Some IFAs use Quilter as a DFM.

dunstonh

bjorn_toby_wilde said:

badmemory said:

An FA not an IFA??

Not necessarily. Some IFAs use Quilter as a DFM.

Quilter platform is also available to IFAs.  Indeed, it originated as an IFA platform under the brand Selestia, which was later bought by Skandia and then by Old Mutual Wealth.    I have used Quilter in the last year but only once as its no longer that good value but it does offer wider functionality than many other platforms (which is why I used it in that one case as no-one else would take the case).