Quick pension tax relief question....

[GT03ROB]

....am I correct in thinking that the tapering off of the annual allowance is just for the purposes of tax relief? IE: there is nothing to stop more money going into a pension, you just don't get the tax relief?

[PurpleMoonlight]

Contributions in excess of your allowance incur a tax charge.

[bogie]

correct....... there is still the £1million lifetime allowance

[GT03ROB]

PurpleMoonlight said:

Contributions in excess of your allowance incur a tax charge.

So no relief you mean.

[PurpleMoonlight]

GT03ROB said:

So no relief you mean.

If they are employer contributions HMRC will levy a tax charge on the excess at your marginal rate.

If they are personal contributions, I think they levy a tax charge equivalent to the excess RAS tax relief claimed by the pension provider.

[GT03ROB]

Ok, hypothetically income 250k...... employee pension contribution 6k.... employer 8.5k... will everything be taken care of through via reliefs no other issues?

[PurpleMoonlight]

Yes there will be a tax charge imposed.

Is this an occupation pension scheme or a personal pension scheme?

If the latter, is your contribution before or after relief at source?

[GT03ROB]

PurpleMoonlight said:

Is this an occupation pension scheme or a personal pension scheme?

Occupational.

[PurpleMoonlight]

If occupational your £6000 should be a gross contribution.

You annual allowance is £10,000.

So unless you have some carry forward allowance from previous tax years, you should have to pay tax on £4500 of the employer contribution at 45%.

[GT03ROB]

PurpleMoonlight said:

If occupational your £6000 should be a gross contribution.

You annual allowance is £10,000.

So unless you have some carry forward allowance from previous tax years, you should have to pay tax on £4500 of the employer contribution at 45%.

Thanks. For various reasons if it's just additional tax in the current tax year then it's no problem,