Pensions

[LOCUM]

The next hurdle is to choose the right SIPP provider and it seems like a tough job to pick one.I mainly want to invest in Gold and Tracker funds ( passive investor-not clever nor have the intellect or patience to play the share trading game).Will contact Hanson wealth and hopefully will get some sensible advice.Any other recommendations for a good IFA who specialise in SIPP.Also i would like to go for a SIPP which can let me invest in commercial property (if possible).People may wonder why i am posting here when i should be seeking specialist advice but to be honest i have done reasonably good home work reading many of the posts here even before i approach an IFA.This forum just rocks-even a novice like me is able to get some basic knowledge in investment.I never dreamt i could make sense of the jargon.(not that i do now but atleast 100 times more than i thought i could) Hats off to all of you who spend valuable time helping others.

[Jessica@WhiteFieldTax]

You can exceed the 40k under carry back rules. If you have not used your full pensionable allowance in the last few years, this can be used to pay more into your pension in anyone year.

Yes, quite true. As I understand it the effect of the Pension Period Input rules though are that you can only exercise carry back if the scheme was in open at the time. I.e. You can't set a new policy up today and carry back into it for prior years. Always worth checking with a pensions specialist though, most IFA practices have a resident geek who knows the rules.

[ContrataxLtd]

Yes, quite true. As I understand it the effect of the Pension Period Input rules though are that you can only exercise carry back if the scheme was in open at the time. I.e. You can't set a new policy up today and carry back into it for prior years. Always worth checking with a pensions specialist though, most IFA practices have a resident geek who knows the rules.

That's as I understand it also Jessica. You also have to be careful with the input period as these aren't always aligned to the tax year (most are which makes sense so it doesn't come up often) so you can get some funny uses of the allowances/carry backs.

Martin
Contratax Ltd

[TheFaQQer]

Yes, quite true. As I understand it the effect of the Pension Period Input rules though are that you can only exercise carry back if the scheme was in open at the time. I.e. You can't set a new policy up today and carry back into it for prior years. Always worth checking with a pensions specialist though, most IFA practices have a resident geek who knows the rules.

That's correct - as long as you had a scheme in operation, you can pay into it retrospectively.

[MarillionFan]

That's correct - as long as you had a scheme in operation, you can pay into it retrospectively.

Calculator here.

Carry forward and annual allowance calculator

I'm going to boost mine for this financial year for what I didn't put in over the previous years as a contractor & I'm then converting to a SIPP to buy a new commercial premises for my Plan B.

[PerfectStorm]

Nothing new here, but I think this NW guide covers the points made in this thread reasonably well

Claiming for Pension Contributions as an Expense | Nixon Williams

[LOCUM]

From Nixon Williams website

Personal Pension Contributions
These are contributions made to a pension scheme from personal funds and as such attract personal tax relief. The pension provider will reclaim the basic rate tax paid to make the contribution and this will be added to the pension fund. i.e. an £80 contribution will add £100 to the pension fund). Your basic rate band will also be extended by the gross pension contribution (£100 in this example) so if you are a higher or additional rate tax payer tax relief is given in full i.e. up to the top rate of tax you pay.

Can you explin the last bit in the above paragraph using a simple example.A company earns £100,000 per annum,expenses £20,000,Salary £9000,Pension £9000.

[Contreras]

From Nixon Williams website

Personal Pension Contributions
These are contributions made to a pension scheme from personal funds and as such attract personal tax relief. The pension provider will reclaim the basic rate tax paid to make the contribution and this will be added to the pension fund. i.e. an £80 contribution will add £100 to the pension fund). Your basic rate band will also be extended by the gross pension contribution (£100 in this example) so if you are a higher or additional rate tax payer tax relief is given in full i.e. up to the top rate of tax you pay.

Can you explin the last bit in the above paragraph using a simple example.A company earns £100,000 per annum,expenses £20,000,Salary £9000,Pension £9000.

Net £9,000 personal contribution is grossed up to £11,250 (this is what the pension receives after tax relief). Company may then contribute up to £28,750 (gross, it doesn't get relief) for the pension to receive a total of £40k. Your personal tax allowance is increased by £11,250, meaning the company can pay out further net dividends of £10,125 without you incurring high rate tax.

Btw, my previous post suggesting £9k + £31k contribs was clearly wrong, as you can see. I'm not guaranteeing the above figures either!

Will re-iterate that it would be sensible to discuss this with a tax professional when commiting large sums like that.

Would also question why £9k salary?

[Forbes Young]

Thanks for all your valuable suggestions.I went onto Hargreaves Landsown SIPP website where they clearly mention that a company contribution could be unto £40,000 per tax year.I am quite confident now about the cap.I really liked the idea of CONTRERAS i.e £9000 personal + 31,000 company contribution.I have decided to contact a specialist IFA.

Forbes Young- i can't find Phillip Lee on Hanson wealth website.Did you get the name wrong ? Does he specialise in SIPP ? How would you rate his services ?

Philip Lee works through Hanson - dont know the admin/website detail. I rate him highly - Ive known him for a long time. You will need to ask him about how specialised he is in various options.
Graeme Bennett ACMA MBA

[LOCUM]

Net £9,000 personal contribution is grossed up to £11,250 (this is what the pension receives after tax relief). Company may then contribute up to £28,750 (gross, it doesn't get relief) for the pension to receive a total of £40k. Your personal tax allowance is increased by £11,250, meaning the company can pay out further net dividends of £10,125 without you incurring high rate tax.

Btw, my previous post suggesting £9k + £31k contribs was clearly wrong, as you can see. I'm not guaranteeing the above figures either!

Will re-iterate that it would be sensible to discuss this with a tax professional when commiting large sums like that.

Would also question why £9k salary?

The £9000 figure i am told is the most you can take as a salry + £ 30,000 as dividend so you are most tax efficient and anything above 9000 will incur income tax.Am i wrong ?