Originally posted by Albert49
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Previously on "The Loan Charge and Pensions and Settlement..."
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SIPP
Originally posted by prozak View PostI've recently moved to FTE, so not sure how I would do that with the company scheme.
But the way I see it - it's savings either way so contributing this year is a benefit in the long term anyway.
eg FTE Salary £50K, employer contributes 10% (5K), you contribute 5% (2.5K), contribution you can make to a SIPP this year = £32.5K
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Originally posted by Albert49 View PostI would suggest that you wait just in case by some miracle the Loan Charge is changed/ not bought in, you have until end of March 2019 to contribute.
But the way I see it - it's savings either way so contributing this year is a benefit in the long term anyway.
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Originally posted by prozak View PostThanks.
Yes I just realised that! So I would have to up my pension immediately!
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Originally posted by Albert49 View PostThe loan charge classes your loan amounts as income in this tax year (2018/19), so any pension contribution to offset it needs to be made this year as well. A pension contribution will offset the LC tax due for a closed tax year, but may not if the tax year is still open, you should probably take advice if your years are open.
Loan Ranger has posted an excellent guide in this forum explaining how much you can contribute.
https://www.contractoruk.com/forums/...hlight=pension
Yes I just realised that! So I would have to up my pension immediately!
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Tax year 2018/19
The loan charge classes your loan amounts as income in this tax year (2018/19), so any pension contribution to offset it needs to be made this year as well. A pension contribution will offset the LC tax due for a closed tax year, but may not if the tax year is still open, you should probably take advice if your years are open.
Loan Ranger has posted an excellent guide in this forum explaining how much you can contribute.
https://www.contractoruk.com/forums/...hlight=pension
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Doing some reading.
Seems the level of "income" for the year would reduce the annual allowance to £10k and then anything over that is taxed at the upper amount.
So maybe not a viable strategy.
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The Loan Charge and Pensions and Settlement...
Hi All,
I am awaiting feedback from accountant and a LC expert, but in the meantime I was wondering whether people have worked out LC v Settlement calculations including pensions?
I know nothing about pensions so in the dark a little.
I am currently in FTE and have signed up to a pension recently. So I am trying to find out the difference between settlement and risking the LC if I start putting the maximum into my pension in 2019/2020 when the LC takes effect.
In the years in question that i had the loan (2 half years) i used up all my allowances with income and dividends also - in 2019/2020 if we includ my loans I will be well into the "additional rate" level.
Anyone had advice in this regard?Tags: None
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