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Posted Sun, 05 Jan 2025 13:21:25 GMT by smd61
This may be obvious to some but I'm somewhat confused about where higher rate tax relief on payments to a SIPP would be paid to and how it should be handled. If the SIPP provider receives the amount directly then all seems correct, but if the individual is the recipient via cheque, and this relief amount was then paid into the SIPP, would the provider not attempt to then claim basic rate relief on that amount? Thanks!
Posted Mon, 20 Jan 2025 08:48:00 GMT by HMRC Admin 21 Response
Hi,
If higher rate relief is not automatically claimed by your SIPP, you can do so via your Self Assessment return, or by contacting us directly - you can find out how to do this here: Tax on your private pension contributions.
Any refunds received can be paid back into your SIPP, where any basic rate relief due will be applied.
Thank you.
Posted Mon, 20 Jan 2025 18:57:20 GMT by maxb
@smd61 The higher rate relief never goes to the pension, it goes to the individual - but, the amount of the relief is calculated such that you do not receive it tax free - effectively you end up paying tax on the relief refund. You should make a contribution such that the amount plus basic rate relief is the amount you actually want added to your pension. Once you claim and receive the higher rate relief, your final position will be as if you paid no tax on the sum that ended up within your pension, and you paid your normal rate of tax on the Income that didn't enter your pension - just by a somewhat complex route.
Posted Thu, 23 Jan 2025 20:39:40 GMT by smd61
Thanks @maxb, that helps clear that up for me.

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