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  • RE: Pension contributions and tax relief

    Hello, I have a similar question, I’d be grateful for clarification. I aim to keep my taxable income just under £100k in order to avoid losing my personal allowance ( the so called 60% tax trap ) . My work is sessional , so I can fine tune how much I work & earn in order to achieve this. I have a private pension that I top up if I do exceed the threshold ( £100k). Looking at tax calculations from previous years, I understand that if I pay £20,000 net into my private pension, then my 20% tax threshold is raised by £25,000( 20,000*100/80) to £50,270+ 25000 , therefore I am only charged 20% tax instead of 40% ( I.e. I am reclaiming the extra 20% tax relief due ) . What I’m not clear on is how this affects my overall tax calculation if my income exceeds the £100k threshold. What exactly happens to the PA ? Eg : If my income is £125,000 I will forfeit £5000 of my PA . So I decide to pay £20,000 into my personal pension , which is grossed up to £25,000 on the self assessment. Have I now regained my PA ? How much am I paying at 0% , 20% and 40%. ? In other words, if I earn £125,000 ( after deductible expenses etc) , exactly how much must I pay into my personal pension in order to avoid losing any of my PA ? Hope that makes sense. Thanks in advance for a reply.