Pension instead of 40% tax..

[anonymous-user]

The initial message was deleted from this topic on 10 March 2019 at 16:34

[anonymous-user]

Pension 1 & 2 are taxed at source @ 40% so I guess would always have to claim that back via tax return.

[Welshbeef]

Jimboka said:

Pension 1 & 2 are taxed at source @ 40% so I guess would always have to claim that back via tax return.

I think you’ll find those pensions are only @20% you need to do a self assessment to ensure your getting the correct rebate.

If your intending to continue to pay in more they your tax code will change to anticipate

[anonymous-user]

Sorry I meant that they are both currently taxed at source at 40%
So if I can bring down overall earnings to the 20% tax level, i’d need to sort that..

[Welshbeef]

Jimboka said:

Sorry I meant that they are both currently taxed at source at 40%
So if I can bring down overall earnings to the 20% tax level, i’d need to sort that..

Why would you want to do that?

[JulianPH]

Tax relief on pension contributions is always at your highest marginal rate. You therefore could have unclaimed higher rate tax relief that is outstanding.

Ideally you would want to go for salary sacrifice on future contributions (to save you having to make a reclaim). The additional 20% tax reclaim is not placed within your pension otherwise (it is paid directly to you). So you may also be better off just taking this money every year.

It is both complex and simple, depending on what you want to achieve. Intelligent Money will give you free guidance (though not personal advice) and this may be worth a phone call (ask for Nik, Will or Paul - given the subject). See the sticky at the top.

[anonymous-user]

Thanks for the comments, cleared up a few points there