Kevin

Hi I have a similar scenario to the above, but don't understand the response given. If you can only refund all the tax paid in the year the contribution was made in and this tax is insufficient (due to tax not having been paid on the Personal Tax Allowance) then the tax refund can never be up to 100% of the annual earnings given that everyone receives a Personal Tax Allowance. Given that people with no earnings are able to claim back a limited amount of tax on their pension contributions it is also the case that HMRC do repay tax in excess of that actually paid in the year. I have been unable to find any legislation which states that the amount of tax reclaimable on lump sum pension contributions is limited to the amount of tax that the individual has paid in the tax year. There is, however, guidance on the Moneyhelper.Org Website (provided by Government's Money and Pensions Service) that states "Firstly, any contributions made by you or someone else on your behalf must be equal to or less than your relevant UK earnings for the tax year in which they are made. For example, if you earn £20,000 but put £25,000 into your pension pot (perhaps by topping up earnings with some savings) – you’ll only be entitled to tax relief on £20,000." As such this example indicates that Tax Relief is payable on a Pensions Contribution of £20,00 as long as an individuals earnings are £20,000 and makes no mention that the Tax Relief is limited to the amount of income tax the individual has paid in the year. Therefore, if the answer is that only tax paid, in the tax year the pension contribution was made in, can be refunded please state where this is detailed in the tax regulations? In addition if this is the case then please contact the Money and Pensions Service and advise them that they have provided incorrect advice to British citizens. If on the other hand, the tax refund can be in excess of tax paid in the year, as per the advice from the Money and Pensions Service, please advise the process for claiming this tax back?