Hi all,

First post, but frequent lurker.

I have question or two about tax relief on pension contributions and adjusted net income. I don't work in the UK at the moment, but I'm considering returning. Forgive my lack of knowledge, as retirement savings where I am take a very different form.

I'm confused as to tax relief (particularly higher rate) on SIPP contributions, and how they pertain to adjusted net income.

My income will be purely taxed via self assessment, to to overseas employer.

If I make 100,000 gross salary ( no other) incomes or contributions) and contribute 32,000 into a SIPP, does my adjusted income now become 68,000?

I understand that HMRC will add 8,000 basic relief into my SIPP pot to reach the 40,000 annual max. I also understand that I can claim higher rate relief. Is this in addition to reducing my taxable income?

What form does that higher relief take? Is it a cheque from HMRC, or some form of credit?

I'm unsure as to whether there is a double-whammy of benefits - reducing my adjusted taxable income to 68,000 AND gaining tax relief, or whether it is one or the other.

When I run the numbers through the MSE tax calc, it suggests to me that if I make 32k a year SIPP contributions, I'm reducing my taxable income by said amount. At the bottom, under my pension contribution amount, there is a "pensions HMRC" figure, which is just over 20k. This looks like pension tax relief figures.

Can someone kindly explain to me what the end result would be if, on 100k, I put 32k into a SIPP and claimed higher rate relief;

What would my adjusted taxable income?

What would be in my SIPP pot.

What would my higher rate relief be, and in what form (cheque, further income reduction etc)?

Because at this point, using the MSE calculator - unless I'm misreading the results - it reads as if I'm reducing my salary by 32k and then getting more back through relief than I'm paying in overall income tax.

If anyone could clarify what my position would be, I'd be very grateful.

Gandhi