SIPP transfer resulting in tax code change

HawkE

Hell Everyone

I recently transferred from my SIPP into a new provider. To my surprise a few weeks later I have received a Tax code notice from HMRC which shows a new line item for Personal Pension Relief that increases my tax-free amount with a new tax code reflecting this.

The explanation in the explanatory note to this line item says "it is the tax relief you have claimed for your personal pension contributions because you pay Income Tax at a higher rate. Basic Rate tax relief is given at source by your pension provider".

This does not make any sense as there have been no new pension contributions at all and only this one SIPP transfer. As such I should not have any tax code change.

Am I missing something? Has anyone else experienced this?

MeteredOut

Was this an in-specie transfer from provider to provider, or a manual transfer you did. Have you checked your new provider to check you've not been given some additional tax relief?

Or have you recently submitted a self-assessment or any other HMRC form and provided pension payment details?

DRS1

Well you sometimes hear of people transferring money from one ISA to another but getting the process wrong and taking money out of the first ISA and the contributing it to the new ISA. It almost sounds as if this is what happened on your pension transfer. Hopefully not.

As for higher rate relief on pension contributions I thought you had to claim that. You fill in a form online or put a figure in your tax return. Did you do that? The mere fact of a contribution going into a pension wouldn't trigger a claim for higher rate relief.

HawkE

https://forums.moneysavingexpert.com/discussion/comment/82168736#Comment_82168736

It was a cash transfer from provider to provider. No money came to me - it happened between the two providers as would be expected for a transfer.

I haven't specifically asked the new provider "have I been given some additional tax relief"? (not yet)

I have not recently submitted any self-assessment or any other HMRC form. There have been no contributions in the most recent year for which I submitted a self-assessment.

HawkE

https://forums.moneysavingexpert.com/discussion/comment/82168773#Comment_82168773

No, I haven't claimed higher rate tax relief either on a form or tax return. Since I have not made any new contributions in the last tax year for which I submitted a tax return there were no contributions to report.

DRS1

Is there any way you can work out the amount of this supposed contribution? I imagine the sums for giving just higher rate relief by adjusting the tax free amount are not straightforward. But does it look anything like the amount transferred from one pension to the other?

Dazed_and_C0nfused

I suspect you are conflating a couple of things.

Have you checked your Personal Tax Account to see the gross amount of "personal pension relief" HMRC are showing for the current tax year (not the tax code adjustment)?

If so does this match the gross amount of the relief at source contribution on one of the Self Assessment returns you have filed?

HawkE

https://forums.moneysavingexpert.com/discussion/comment/82169144#Comment_82169144

Yes, I can see the amount of "personal pension relief" HMRC are showing. It does not match either of my last two tax returns which both had zero pension contributions (relief at source or otherwise). I should have zero "personal pension relief".

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82169178#Comment_82169178

You are no doubt correct about not being eligible for any relief in this tax year but you probably need to go further back to establish where the figure originated from.

It will only be from information you originally supplied, in one form or another.

HawkE

https://forums.moneysavingexpert.com/discussion/comment/82169030#Comment_82169030

The personal pension relief is about 2/3rds of the amount transferred from one pension to the other. I am unsure how they would have calculated it.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/82169297#Comment_82169297

No one would have calculated anything as it will have nothing whatsoever to do with the transfer.

Is there a date against the personal pension relief entry in the recent activity section of your Personal Tax Account?