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Where Taxpayers and Advisers Meet

Low Tax Pensioner

Mr_Ben
Posts:1
Joined:Thu Jul 13, 2017 6:59 pm
Low Tax Pensioner

Postby Mr_Ben » Thu Jul 13, 2017 7:20 pm

I hope this is an interesting question for you because I've so far been unable to find a definitive answer.

Following early retirement on medical grounds I was awarded a full pension but arranged it so that I pay only tax of c£60 per annum on an annual pension of c£12,000 with the balance being commuted to a lump sum payment and invested (not in my SIPP). In addition I get c£5,500 p.a. in PIP benefit which is not taxable.

I was aware that I couldn't invest the lump sum in my uncrsytallized SIPP but how much can I continue to contribute to my pension from other sources e.g. untaxed savings and investments? Am I considered a non-taxpayer and therefore only entitled to contribute £2880 (net) per annum or, because I do pay some tax however little, can I contribute 100% of my earnings to my pension fund? If the latter, am I entitled to include PIP in calculating my earnings or only my defined pension scheme?

AnthonyR
Posts:322
Joined:Wed Feb 08, 2017 2:33 pm

Re: Low Tax Pensioner

Postby AnthonyR » Fri Jul 14, 2017 6:40 pm

Your contribution is limited to your relevant UK earnings, which includes employment/self employment/trades/professions. It doesn't include pensions or PIPs as these are not considered earnings. As such you are limited to £2880 (£3600 gross).
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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