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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?
Originally posted by Gandhi
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....but you will be paying UK tax??
Your SIPP contribution comes out of taxed income, so no, your adjusted income does not become £68,000. The provider reclaims the tax and adds that direct to your SIPP. Higher rate relief is claimed through your UK self assessment tax return; any refund due is paid by BACS if you provide your bank details on the self assessment form. HMRC are less keen on sending out refunds by cheque for security reasons, but they will do it if you don't provide bank details.