Did anyone else use pension contributions in 18/19 to offset the loan charge ?

[NeedTheSunshine]

my loans are all old <dec 2010 so loan charge doesnt apply to me at all (afaik)

But if you have open enquiries/discovery assessments pre 2010 then they will be looking to settle those years with their new pre-2010 team. Not sure how that works with pension contributions etc

[dammit chloe]

Depends whether this is simply a Time To Pay deal over the 3 years vs being able to declare loan charge amounts as income in each of the 3 years. I suspect the former which means you cannot mitigate further beyond pension contributions made in 18/19.

I believe it is declaring a 1/3rd each year not TTP. Its intent is to prevent lower paid workers being pushed into high tax bracket so easily.

[Tiger22]

So apparently you can stack loan charge over 3 years under new terms. Does this not open up an opportunity to offset again? perhaps more effectively.

Depends whether this is simply a Time To Pay deal over the 3 years vs being able to declare loan charge amounts as income in each of the 3 years. I suspect the former which means you cannot mitigate further beyond pension contributions made in 18/19.

[CanPayButWouldRatherNot]

So apparently you can stack loan charge over 3 years under new terms. Does this not open up an opportunity to offset again? perhaps more effectively.

my loans are all old <dec 2010 so loan charge doesnt apply to me at all (afaik)

[starstruck]

Les Cameron: When can a pension contribution be refunded? - Retirement Planner

"And with only a few exceptions, HMRC rules unfortunately do not allow to us to turn back the clock on pension contributions."

well hoping this is an exception to add to that list !

Paying over net relevant income has a process where you just request the money back, I discussed on the phone with HL before making the contribution just in case something like this happened.

[dammit chloe]

So apparently you can stack loan charge over 3 years under new terms. Does this not open up an opportunity to offset again? perhaps more effectively.

[CanPayButWouldRatherNot]

It’s fine you have 7 (or 5?) years to get the money back from your pension. I checked on this. This is where you have paid over you net relevant income.

Les Cameron: When can a pension contribution be refunded? - Retirement Planner

"And with only a few exceptions, HMRC rules unfortunately do not allow to us to turn back the clock on pension contributions."

well hoping this is an exception to add to that list !

[starstruck]

Loan charge review means that careful planning to minimise 18-19 earnings and an offsetting pension contribution have been scuppered.

I know find myself in breach of pension rules by this government u turn.

dont get me wrong ... think its a great decision but can I get the keys for the HMRC time machine ?

It’s fine you have 7 (or 5?) years to get the money back from your pension. I checked on this. This is where you have paid over you net relevant income.

[CanPayButWouldRatherNot]

and now regret it ?

Loan charge review means that careful planning to minimise 18-19 earnings and an offsetting pension contribution have been scuppered.

I know find myself in breach of pension rules by this government u turn.

dont get me wrong ... think its a great decision but can I get the keys for the HMRC time machine ?

[CanPayButWouldRatherNot]

Agree that Loan Rangers posts were very informative, however with regards offsetting open years, although it may offset the loan charge tax due, there is still the issue of the underlying tax .
I believe if you pay the LC , the amount paid can be used to offset the underlying tax due for the open year, if you have used a pension contribution to offset the LC , is this still the case?

he believed that once the loan charge ( a one time catch all loaners charge) was paid then they would not come back to us.

for me at 51 it was worth a shot anyway

[Albert49]

Pension Offset open years

Hi,

The Loan Ranger did some excellent work on this topic

https://www.contractoruk.com/forums/...n+contribution

I used this for my 08-09 open year loan to offset it.

Did anyone else do this ?

CPBWRN

Agree that Loan Rangers posts were very informative, however with regards offsetting open years, although it may offset the loan charge tax due, there is still the issue of the underlying tax .
I believe if you pay the LC , the amount paid can be used to offset the underlying tax due for the open year, if you have used a pension contribution to offset the LC , is this still the case?

[CanPayButWouldRatherNot]

Hi,

The Loan Ranger did some excellent work on this topic

https://www.contractoruk.com/forums/...n+contribution

I used this for my 08-09 open year loan to offset it.

Did anyone else do this ?

CPBWRN