I have been unable to find anything to confirm what is quite a simple query.
As I understand it, dividend income contributes to defining whether or not you are a higher rate tax payer.
You pay 33.8% tax on dividend income above the higher rate threshold.
You can claim higher rate tax relief on pension contributions at 20% upto the amount of higher rate tax paid.
But can you claim this relief on Dividend income?
Example 1: Higher rate threhold £50k, £40k salary, £20k dividend income, £5k personal pension contribution (including basic rate relief).
Can £1k (£5k * 0.2) of higher rate pension relief be claimed?
If the answer to Example 1 is Yes:
Example 2: All as per Example 1 but pension contribution is £15k.
Is the higher rate pension relief capped at £3380 (£10k*33.8%), as that is all the higher rate tax that has been paid?
Many thanks in advance for any assistance.