How Much Can I Put Into My Pension
Discussion
Spydaman said:
I want to put a chunk of money into my pension. As I understand it I can put in a maximum of £40k per year but back dated up to 2 years so £120k into total over 3 years. However if I earn less than £40k can I still put in £40k per year or is the maximum reduced to my gross income?
My understanding:1. "Carry forward" goes back three years not two
2. You'll only get tax relief on contributions up to the amount you've earned
3. Be careful if you've been a high(er) earner (simplistically £150k+) as tapering can reduce your annual allowance
Do you have a tax adviser / accountant? They are very used to answering the question "How much can I put into my pension?" using info from your tax returns.
WindyCommon said:
My understanding:
1. "Carry forward" goes back three years not two
2. You'll only get tax relief on contributions up to the amount you've earned
3. Be careful if you've been a high(er) earner (simplistically £150k+) as tapering can reduce your annual allowance
Do you have a tax adviser / accountant? They are very used to answering the question "How much can I put into my pension?" using info from your tax returns.
1. Correct providing you have a pension arrangement in force for those tax years.1. "Carry forward" goes back three years not two
2. You'll only get tax relief on contributions up to the amount you've earned
3. Be careful if you've been a high(er) earner (simplistically £150k+) as tapering can reduce your annual allowance
Do you have a tax adviser / accountant? They are very used to answering the question "How much can I put into my pension?" using info from your tax returns.
2. Only up to your taxable earnings, not all earnings.
3. The £150,000 is income not just earnings (eg everything on your tax return). The annual allowance reduces to £10,000 for the tax year but the full carry forward remains available.
Mrs Spydaman is self-employed and also wants to use her back-dated allowance. The pension company said her allowance is her gross turn-over which didn't sound right so she phoned HMRC who confirmed it's her net. However they also said she can only put in this years allowance minus what she's already put and anything over that i.e. from the previous 3 years, wouldn't get tax relief. Are HMRC wrong or does this sound right?
Gassing Station | Finance | Top of Page | What's New | My Stuff