GCapelli

Hi, I would like to know if my understanding of how tax relief and annual allowance of pension contributions is correct. Could you please comment on the points below? Figures are just an example to clarify my questions. Given that: - A tax payer earns an annual salary lower than their annual allowance (for example 20K salary, 60K annual allowance) - The tax payer contributes in that year to their pension with a contribution higher than their salary, but lower than their annual allowance (for example 40K) Am I right to say that: - This tax payer will receive a tax relief up to 100% of their salary ( in my example that would be 4K) - This tax payer won't pay any tax or charge because the total contributions for that year are below their annual allowance (in my example 40K + 4K < 60K) I look forward to your reply. Best regards Gianluca Capelli

Thanks. My intention was to give you all the details to make my question clear, but I understand your point. Let me try to rephrase it in general terms. Someone's relevant earnings are lower than their annual allowance. If this person pays into their pension an amount higher than their relevant earnings, but lower than their annual allowance, will this person have to pay tax? Thank you

Hi, I will use an example to clarify my questions. At the end of the current tax-year my situation will be: - I will have earned £ 8,000 pounds (gross salary) from my previous job terminated in June - I will have paid £1,000 in taxes - my former employer has paid into my pension £5,000 (through salary sacrifice) - I will have received a TAX-FREE scholarship of £18,000 Since I would like to top-up my private pension with some savings I have, I would like to understand what I should do to maximise the tax-relief and not to exceed my annual allowance. My understanding is as described below: - I can receive tax-relief up to 100% of my taxable earnings, therefore only the £8,000 from my previous job: the money from the scholarship are tax free and they should not be considered. - According to the previous point, I could pay into my pension £6,400 to which £1,600 of tax relief would be added, for a total of £8,000 - If I pay into my pension other £14,000, I won't receive any tax relief, BUT I won't pay any tax since I will stay below my annual allowance of £60,000 (£5.000 paid by my previous employer + £14,000 paid by me + £6,400 paid by me + £1,600 tax relief = £ 27,000) Could you please confirm if my understanding is correct? I have already read all the guidance published on your website but I cannot find a situation similar to mine to check my understanding. Thanks for your support Gianluca Capelli

Hi, I would like some clarification about the following. Let's say that at the end of this tax year I will have received from my employer £8,307.04 (Taxable income); because of my tax free amount (£12,230) I have paid in taxes £1,049.40. NOTE: just for sake of clarity, my employment terminated in June and I am now a full time student without any income, therefore what earned until then will be the total of my taxable income for this year. I want to make some contribution into my private pension, and my questions are: - What is the maximum amount I can pay into my pension and have tax relief? is my taxable income of £ 8,607.04 OR the amount of tax paid divided by 0.2, therefore £1,049.40 / 0.2 = £5.245,2? Note: 0.2 comes from the 20% tax paid - what happened if I pay in my pension £20.000? Will I be taxed? Will I simply not receive any tax relief over the amount of tax I paid?? I look forward to your reply Mr capelli