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  • FIRST POST
    • BingoBandit
    • By BingoBandit 14th Jun 19, 10:52 AM
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    BingoBandit
    Australian pension scheme - eligible for carry forward?
    • #1
    • 14th Jun 19, 10:52 AM
    Australian pension scheme - eligible for carry forward? 14th Jun 19 at 10:52 AM
    I set up a UK pension in 2017/18 and have been paying in 8k per year since then. Due to an inheritance I'm able to put the maximum 40k in this year via a director's loan to my company and use up any allowable carry forward from any previous years. This will be an additional 32k for each of the previous 2 years that I've been registered with a pension scheme.

    Back in 2003/4 I was working in Australia on a temporary visa and was enroled in a superannuation pension scheme. I claimed some of the balance back when I left Australia, but a) would I still be registered on the scheme even though I haven't paid into it in years? And b) if so, would this count as a qualifying pension scheme under HMRC rules?

    In other words, if I'm still registered on the Australian scheme, can I put in an extra 40k for the 2016/17 tax year to max out the previous 3 years' carry forward?
Page 1
    • Dazed and confused
    • By Dazed and confused 14th Jun 19, 11:04 AM
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    Dazed and confused
    • #2
    • 14th Jun 19, 11:04 AM
    • #2
    • 14th Jun 19, 11:04 AM
    How much will your relevant earnings (for pension contribution purposes) be for the current tax year?
    • BoGoF
    • By BoGoF 14th Jun 19, 11:06 AM
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    BoGoF
    • #3
    • 14th Jun 19, 11:06 AM
    • #3
    • 14th Jun 19, 11:06 AM
    First of all what is the level of your earnings for the current year? The maximum you can pay is the level of your relevant earnings, regardless of any carry forward.
    • BingoBandit
    • By BingoBandit 14th Jun 19, 11:23 AM
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    BingoBandit
    • #4
    • 14th Jun 19, 11:23 AM
    • #4
    • 14th Jun 19, 11:23 AM
    My salary is just over 8k (I have other non-earnings income from company dividends and rental property). I'm a company director with another family member, so I understand that if the company pays in for us instead of doing personal contributions then we can put in up to 40k per year each and won't be restricted by our low relevant earnings amount.

    However, the company only makes about 30-40k profit per year, so we can only max out carry forward if we're able to put in some of the inheritance money as director's loans for the company to use in paying the pensions. Our accountant says that shouldn't be a problem as the loans would be solely for business purposes (paying staff pensions) but an ex-accountant friend thinks that HMRC might have an issue with it. I'm struggling to find any definitive guidance on that point but we want to get as much of the inheritance into our SIPPs as possible. The other director has been enroled in a UK pension scheme for years, so using the full carry forward allowance isn't such an issue for him.
    • Dazed and confused
    • By Dazed and confused 14th Jun 19, 11:27 AM
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    Dazed and confused
    • #5
    • 14th Jun 19, 11:27 AM
    • #5
    • 14th Jun 19, 11:27 AM
    I am at a bit of a loss as to why you think you can contribute more than 8k (6,400 plus 1,600 tax relief if paid into a relief at source scheme).
    • BingoBandit
    • By BingoBandit 14th Jun 19, 11:38 AM
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    BingoBandit
    • #6
    • 14th Jun 19, 11:38 AM
    • #6
    • 14th Jun 19, 11:38 AM
    The company would be paying the contributions, so it wouldn't be a relief at source scheme. We would be providing the capital to the company to make the payments. i.e. making a loan to the company to fund company expenses, in this case pension contributions.
    • BoGoF
    • By BoGoF 14th Jun 19, 11:50 AM
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    BoGoF
    • #7
    • 14th Jun 19, 11:50 AM
    • #7
    • 14th Jun 19, 11:50 AM
    HMRC will be all over a deduction for a company contribution that creates a loss for the company - which is what you are proposing doing.
    • BingoBandit
    • By BingoBandit 14th Jun 19, 11:51 AM
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    BingoBandit
    • #8
    • 14th Jun 19, 11:51 AM
    • #8
    • 14th Jun 19, 11:51 AM
    Ah, ok, didn't realise that. So the company can do 40k this year/next couple of years and the other director can use any available carry forward up to his 8k/year then, presumably?

    Would the Australian scheme count as being registered in a qualifying pension scheme if I wanted to put in 8k for the 2016/17 year?
    • Dazed and confused
    • By Dazed and confused 14th Jun 19, 12:01 PM
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    Dazed and confused
    • #9
    • 14th Jun 19, 12:01 PM
    • #9
    • 14th Jun 19, 12:01 PM
    if I wanted to put in 8k for the 2016/17 year?
    Unless you have access to a TARDIS you cannot contribute to a pension scheme for a tax year that had ended.
    • BingoBandit
    • By BingoBandit 14th Jun 19, 12:12 PM
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    BingoBandit
    If the Australian schemes are recognised by HMRC then I'd have some carry forward allowance available up to my relevant earnings from the previous 3 years, unless I've misunderstood?
    • Dazed and confused
    • By Dazed and confused 14th Jun 19, 12:25 PM
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    Dazed and confused
    I set up a UK pension in 2017/18 and have been paying in 8k per year since then
    My salary is just over 8k
    You are already paying an amount (nearly) equal to your salary so how are you going to be eligible to pay more?
    • Marcon
    • By Marcon 14th Jun 19, 12:35 PM
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    Marcon
    If the Australian schemes are recognised by HMRC then I'd have some carry forward allowance available up to my relevant earnings from the previous 3 years, unless I've misunderstood?
    Originally posted by BingoBandit
    Needs to be a 'registered' pension scheme - and in this context, that means a UK registered scheme.
    • BingoBandit
    • By BingoBandit 14th Jun 19, 12:43 PM
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    BingoBandit
    You are already paying an amount (nearly) equal to your salary so how are you going to be eligible to pay more?
    Originally posted by Dazed and confused
    I've used up my pension allowance for 2017/18 and 2018/19 (haven't paid anything in yet for 2019/20) but may still have a carry forward allowance of circa 8k available from the 2016/17 tax year. That's only if HMRC recognises the Australian scheme as a qualifying pension scheme, which is what I'm having difficulty in finding out. The contributions table at HL (sorry, can't post links yet) seems to indicate that the 2016/17 carry forward would still be available.
    • BingoBandit
    • By BingoBandit 14th Jun 19, 12:46 PM
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    BingoBandit
    Needs to be a 'registered' pension scheme - and in this context, that means a UK registered scheme.
    Originally posted by Marcon

    Thank you, that's what I was mainly trying to find out.
    • Dazed and confused
    • By Dazed and confused 14th Jun 19, 12:48 PM
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    Dazed and confused
    You are completely missing the point that if you have earnings (for pension contribution purposes) of 8k you can only pay 8k (gross).

    Carry forward is irrelevant.
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 5:10 PM
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    AnotherJoe
    If the Australian schemes are recognised by HMRC then I'd have some carry forward allowance available up to my relevant earnings from the previous 3 years, unless I've misunderstood?
    Originally posted by BingoBandit
    You've misunderstood
    You can only pay in up to what you've earned in that year. You cant retrospectively pay in for previous tax years.
    If you earned 100k a year for three years and paid in nothing for those 3 years and then in year four earned 8k, you can only pay in 8k. Your company can pay additional I don't know what the limits are on that but AFAIK they aren't related to your previous earnings.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • grnglide
    • By grnglide 14th Jun 19, 5:41 PM
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    grnglide
    But to use any carry forward you need to be have been a member of a recognised scheme at any time before the period that is carried forward.


    Is the OP wanting to use the Australian scheme as that membership as he has no other membership of a UK scheme?


    If so the Australian scheme won't do but any other UK scheme will. Have you never been a member of a UK pension scheme?
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