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SIPP Contributions for 21016/17

Sepoy
Posts: 3
Joined: Mon Nov 14, 2016 10:50 pm

SIPP Contributions for 21016/17

Postby Sepoy » Thu Nov 17, 2016 1:58 pm

I retired earlier this year, but as I’m still in my mid 50’s haven’t yet taken my Final Salary company pension.

My only earnings this tax year is £500 but I do have quite a few ordinary UK shares, in FTSE companies, which pay a reasonable dividend of £15,000 per year.

I understand that the first £5,000 of dividend income is tax free and the remaining £10,000 can be set against my personal allowance, making £10,500 of income for 2016/17

Am I allowed to use the full £10,500 as a SIPP contribution for the tax year?

LozaACCS
Posts: 1486
Joined: Wed Aug 06, 2008 3:55 pm

Re: SIPP Contributions for 21016/17

Postby LozaACCS » Thu Nov 17, 2016 9:16 pm

You can but unfortunately tax relief would only be available on £3,600.
Relief is limited to the higher of £3,600 or 100% of net relevant earnings, dividends are not net relevant earnings.

Sepoy
Posts: 3
Joined: Mon Nov 14, 2016 10:50 pm

Re: SIPP Contributions for 21016/17

Postby Sepoy » Thu Nov 17, 2016 11:34 pm

Many thanks for your reply, LozaACCS.

It wasn't what I wanted to hear, but it was as I expected.

Sepoy
Posts: 3
Joined: Mon Nov 14, 2016 10:50 pm

Re: SIPP Contributions for 21016/17

Postby Sepoy » Mon Jan 09, 2017 9:57 pm

So does rental income from residential property count towards my earned income?

Many thanks.

jason13
Posts: 131
Joined: Mon Mar 28, 2011 2:02 pm

Re: SIPP Contributions for 21016/17

Postby jason13 » Tue Jan 10, 2017 6:34 pm

Sepoy wrote:So does rental income from residential property count towards my earned income?


No, it does not.


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