Adding past years allowance to SIPP

[forest172]

So I have started a vanguard SIPP and contributed £40k via my Ltd company. I know you can back date a further 2 previous years and put it against your companies corporation tax for that year, adding a further £80k to the pot. Apparently if you had a plan going during those previous 2 years

So I have a PPP that I started back in 1999, would I have to add to that or can I put the £80k into vanguard? Or add to the old PPP and have to do a transfer?

Obviously I want to transfer my PPP in due course but not if it ruins things for me. Accountant is looking into it for me as we speak

[forest172]

I put £40k in from my Ltd company

[Piersman2]

I did this last year after opening a SIPP, made an employers contribution from my Ltd company for £40k.

If my understanding of the rules is correct, you can only put in the previous years allowances if you had the SIPP running during those years. You can't open a new SIPP and then bung in 3 years worth of contributions.

[forest172]

Piersman2 said:

I did this last year after opening a SIPP, made an employers contribution from my Ltd company for £40k.

If my understanding of the rules is correct, you can only put in the previous years allowances if you had the SIPP running during those years. You can't open a new SIPP and then bung in 3 years worth of contributions.

I’ve been reading as long as you had a pension in place for those previous years you can contribute previous tax years from your Ltd company

[forest172]

anonymous said:

[redacted]

Might be wrong but I thought it went against your companies corporation tax bill as a business expense. Up to £40k

[Jockman]

Oh do behave

It’s an employer contribution so no link to salary levels. 19% Corp tax relief.

So long as you have had a pension in place over the last 3 years you can utilise those years so long as you utilise the current years allowance first then 3 years prior, 2 years prior etc in that order.

[Stay in Bed Instead]

Jockman said:

Oh do behave

It’s an employer contribution so no link to salary levels. 19% Corp tax relief.

So long as you have had a pension in place over the last 3 years you can utilise those years so long as you utilise the current years allowance first then 3 years prior, 2 years prior etc in that order.

This is correct.

The only thing I would add is that if you were a high earner during any of the previous three years then your carry forward allowance from that year may be lower than £40,000.

Talk to your SIPP provider, they will need to be satisfied you can make the contribution within limits.

[forest172]

So inc this year(which I’ve done) I can go back a further 3?

Then the golden question do I have to put it in my pension from 1999 or can I put it in my vanguard sipp which I’ve open this tax year?

[DoubleSix]

You are free to make your contribution into any registered scheme.

[Stay in Bed Instead]

Yup, four years in total and it can be paid to any pension arrangement.

[forest172]

superb, so putting £160,000 in would give me a corporation tax refund for this year? Will that happen then?

[worsy]

forest172 said:

superb, so putting £160,000 in would give me a corporation tax refund for this year? Will that happen then?

No it gives you an accounting loss which may be transferable to next year.

[Stay in Bed Instead]

forest172 said:

superb, so putting £160,000 in would give me a corporation tax refund for this year? Will that happen then?

Yes, you can use retained profits to make the contribution and post a loss for the current year.

You can reclaim last years CT, and of there is still anything left it would carry forward to subsequent years.

[forest172]

Perfect just what I wanted to hear


Shall I move the funds to my Vanguard SIPP before I submit a transfer and close that 1999 pension?

[ontothenext]

Jockman said:

Oh do behave

It’s an employer contribution so no link to salary levels. 19% Corp tax relief.

So long as you have had a pension in place over the last 3 years you can utilise those years so long as you utilise the current years allowance first then 3 years prior, 2 years prior etc in that order.

Regarding the salary levels - the contribution cannot be greater than basic salary. Is this correct?

[Mr Pointy]

forest172 said:

superb, so putting £160,000 in would give me a corporation tax refund for this year? Will that happen then?

If you're moving that amount of money around surely you need to be talking to your accountant, not relying on some unknown on a forum?

[leef44]

This is all assuming you were earning less than the threshold when the 40k allowance starts to get tapered off. I can't remember of the top of my head what those thresholds are but it is over 100k earned annual income.

[forest172]

Mr Pointy said:

If you're moving that amount of money around surely you need to be talking to your accountant, not relying on some unknown on a forum?

He got back in touch faster than I thought he would and yes it’s correct

[Jockman]

ontothenext said:

Jockman said:

Oh do behave

It’s an employer contribution so no link to salary levels. 19% Corp tax relief.

So long as you have had a pension in place over the last 3 years you can utilise those years so long as you utilise the current years allowance first then 3 years prior, 2 years prior etc in that order.

Regarding the salary levels - the contribution cannot be greater than basic salary. Is this correct?

If contribution is from employer then no link to salaries. £40k limit.

If contribution from employee then, yes, linked to your salary level.

Please remember there is NO limit on pension contributions. The limit is on the tax relief, up to £40k max.

I hope I don’t regret this previous sentence