Zachary Gaber
Joined: 6/27/2024
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Tax Relief on Pension Contribution Made from Non-Taxed Income
I recently received a £38000 life insurance payout after the death of my aunt and decided to put a £9600 of it into my pension. My pension provider automatically added an additional 20% tax relief to the value - £2400. Were they correct to do so? This income was from life insurance / inheritance which was not taxed so can it be subject to tax relief? Adding another layer of complexity, at least for me, this life insurance was from overseas as my aunt lived in the US. I am a full-time employee, living, working, and paying taxes in the UK. Thank you.