nofuse1971

This appears to be an area where HMRC are very reluctant to clarify the wording or giver any help. Examples given in PTM133810 are very vague and do not make it clear what period of time HMRC deem to be relevant. People use this forum as a form of clarification, after all "Tax doesn't have to be taxing", however when forum users try to understand the rules that are "Taxing", HMRC respond with a standard phrase of "HMRC cannot answer this as it relates to financial advise which we are not authorised to give". Seeking clarification is not financial advice. Maybe the question below will get answered because even IFAs get confused with the rules; A person has £900,000 is savings and contributes £4,000 to a workplace pension, they also for the past 10 years pay AVCs totalling £10,000 per year. Three years before they retire they decide due to changes to government pension legislation (abolishment of the LTA and increase of AA to £60k) said person decides to increase their pension savings by opening a SIPP and depositing £17,000 (£21,250 after tax relief) Now as I understand this is now classified by HMRC as the relevant time with regards to whether pension recycling has taken place, if it is found to have been pre planned? The following year said person pays £27,000 (£33,750 after relief) in to their SIPP which is purely funded by earning, and the the same amount the following year. Year 10, 4 years after the contributions to the SIPP were started said person retires taking their AVC lump sum of £100,000, no further contributions to made any registered pension scheme in the year of retirement or the two following years. Now the clarification that is sought is how the cumulative figure in the above example is made up. The first substantial increase of £21,250 (year 7) is added in addition to two further years contributions of £33,750 totalling and increase of £88,750 or is the cumulative increase the difference between year 7 and years 8 and 9, i.e. £12,500 plus £12,500 totalling £25,000? Possibly I am not understanding the rule correctly, hence trying to seek clarification, because of the qualifying period of 2 years prior and 2 years after the PCLS is taken, that's if an AVC is classified as a PCLS? Is it therefore and increase from the original £14,000 (normal workplace pension of £4,000 plus AVCs of £10,000) which equates to £23,750 in year 8 and the same in year 9 totalling a cumulative increase of £47,750?

The last line is an error and should be ignored, the only PCLS taken is £100,000 in 2021-2022

Hi, I am looking for clarification of the defination of “relevant time” According to PMT133820 this is stated as: When an individual takes the following steps: - decides to use a pension commencement lump sum as the means to significantly increase contributions to a registered pension scheme, and then - receives the lump sum, and then pays the significantly increased contributions pre-planning occurs at the time the lump sum is paid - this is the “relevant time”. Alternatively, when an individual takes these steps: - decides to use a pension commencement lump sum as the means to significantly increase contributions to a registered pension scheme, and then - pays the significantly increased contributions or otherwise arranges for them to be paid, and then receives the lump sum pre-planning occurs when the significantly increased contribution is made - this is the “relevant time” However the assessment period is two years prior to the PCLS being taken and two years after; so does relevant time have to fall within the 5 year assessment period? For example; Previous total personal pension contribution 2022-2023 - £16,000 Contribution increase 2018-2019 of £20,000, new yearly total £36,000 Contribution increase 2019-2020 of £32,000, new yearly total £48,000 Contribution increase 2020-2021 of £32,000, new yearly total £48,000 Contribution increase 2021-2023 of £15,000, new yearly total £31,000, PCLS taken £100,000 No further contributions in 2023-2024, 2024-2025 So for the above is the "relevant time" 2018-2019 when the first increase was made although this is outside of the 5 year window or 2019-2020?. If 2019-2020 is the "relevant time" the increase is £12,000 so the total used for recyling calculation is £24,000? PCLS taken 2024-2025 of £100000

So if the first answer I was given was incorrect can someone from HMRC answer the question I first asked again

I am planning to retire mid year and would like to know how much I can continue to contribute to a SIPP. I plan to retire around October having earned £40k then claim my workplace defined benefit pension. If I understand correctly my annual allowance would be reduced to £40k, if so can I still pay contributions to a SIPP after retirement in October up to the limit of £40k? I understand following years I am limited to £3600