Pension fund taxation
Discussion
Hi guys,
I hadn't spotted that the tax rules around the amount you can pay into a private pension fund had changed so I have paid too much in for the last tax year.
Knowing that HMRC will want me to pay tax on the amount that I've paid in to my fund that is over the new limit, I contacted my pension fund to ask if I could take it back out again.
That way I could pay the tax and keep what's left.
Whereas at the moment all of the overpayment is locked into my pension fund without any tax benefit of paying in and I've got to find the tax from somewhere else.
Anyway my pension fund say I can't have the money back even though I paid in my mistake and it was my money.
Does anybody know how this works and what position hmrc take about payments into a pension fund over and above the tax-free limits?
Also, do I have any rights in terms of retrieving payments five mistakenly paid into my fund?
Just to be clear are not seeking any financial advice on how to invest my money just wondering if anybody knows what the position is on getting my money back or paying the tax
Cheers
I hadn't spotted that the tax rules around the amount you can pay into a private pension fund had changed so I have paid too much in for the last tax year.
Knowing that HMRC will want me to pay tax on the amount that I've paid in to my fund that is over the new limit, I contacted my pension fund to ask if I could take it back out again.
That way I could pay the tax and keep what's left.
Whereas at the moment all of the overpayment is locked into my pension fund without any tax benefit of paying in and I've got to find the tax from somewhere else.
Anyway my pension fund say I can't have the money back even though I paid in my mistake and it was my money.
Does anybody know how this works and what position hmrc take about payments into a pension fund over and above the tax-free limits?
Also, do I have any rights in terms of retrieving payments five mistakenly paid into my fund?
Just to be clear are not seeking any financial advice on how to invest my money just wondering if anybody knows what the position is on getting my money back or paying the tax
Cheers
https://www.gov.uk/tax-on-your-private-pension
According to this you can ask your pension provider to pay the tax owed to HMRC directly out of you pension fund.
Also says something in there that is you didn't use your whole tax free allowance for the last three years then you can use whatever this difference is for this years contributions.
According to this you can ask your pension provider to pay the tax owed to HMRC directly out of you pension fund.
Also says something in there that is you didn't use your whole tax free allowance for the last three years then you can use whatever this difference is for this years contributions.
Thanks for the replies
If I can get the pension fund to pay the tax liability direct from the pension contribution that would cover my issue as I thought I was going to have to find the tax liability out of other income that has already been taxed.
And yes, I'm pretty sure I had made the maximum contribution in previous years, but I hadn't spotted the budget changes to the contribution thresholds for 16/17 .
The whole thing seems to be structured towards discouraging anybody who has any spare cash from putting into their pension scheme which is bewildering to me.
On the one hand, the government is complaining about the costs of caring for people into old age and on the other hand, it's trying to discourage contributions to a pension scheme.
I just knew I should have been buying classic cars instead!!!!
If I can get the pension fund to pay the tax liability direct from the pension contribution that would cover my issue as I thought I was going to have to find the tax liability out of other income that has already been taxed.
And yes, I'm pretty sure I had made the maximum contribution in previous years, but I hadn't spotted the budget changes to the contribution thresholds for 16/17 .
The whole thing seems to be structured towards discouraging anybody who has any spare cash from putting into their pension scheme which is bewildering to me.
On the one hand, the government is complaining about the costs of caring for people into old age and on the other hand, it's trying to discourage contributions to a pension scheme.
I just knew I should have been buying classic cars instead!!!!
A993LAD said:
And yes, I'm pretty sure I had made the maximum contribution in previous years, but I hadn't spotted the budget changes to the contribution thresholds for 16/17 .
I can't remember the exact details but last year was unusual in that everyone's individual pension input periods were aligned with tax year so many had a double dip on their allowance. So you may have been able to carry forward more than expected.Ask your pension administrator for a contribution statement to confirm whether you have overpaid.
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