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Where Taxpayers and Advisers Meet

Should my mum open a SIPP before she retires next year to take advantage of tax relief on contributions?

Meltourmet
Posts:7
Joined:Thu Jan 16, 2014 11:03 pm
Should my mum open a SIPP before she retires next year to take advantage of tax relief on contributions?

Postby Meltourmet » Sat Oct 28, 2017 11:08 pm

My mother is planning to retire next year from her position as a teaching assistant at a local authority school. She earns roughly £15,000 pa has a company pension to which she contributes c.£1100 pa. She has a meaningful amount of savings so is it worthwhile her opening a SIPP to take advantage of pension tax relief? Eg could she contribute £15000 to a SIPP and get £3000 basic rate (20%) tax relief? Many thanks

Stats
Posts:12
Joined:Mon Mar 05, 2018 10:07 pm

Re: Should my mum open a SIPP before she retires next year to take advantage of tax relief on contributions?

Postby Stats » Wed Mar 21, 2018 11:37 pm

Not an expert, but just gone through a similar exercise myself for the first time.
I think she can at least use the balance of this year's salary, ie £13,900.
I think there is also a "carry forward" of unused contributions from the past 2 or 3 tax years (£13,900 x 3 ?)
Rather than do nothing (and to keep the tax return simple by ignoring carry forward), how about using just the £13,900 allowance for this year ?
Remember, the cheque into the SIPP will be £13,900 less 20%.
I do not think there is any further tax relief unless she is in the higher rate band but some degree of carry forward may still be available for the next tax year.

cliffordpope
Posts:84
Joined:Thu Jun 24, 2010 8:45 am

Re: Should my mum open a SIPP before she retires next year to take advantage of tax relief on contributions?

Postby cliffordpope » Mon Mar 26, 2018 9:18 am


I think there is also a "carry forward" of unused contributions from the past 2 or 3 tax years (£13,900 x 3 ?)
You can can carry forward any unused contributions allowance up to the the maximum of £40,000 per annum, but you get tax relief only up to your salary in the current year.
Tax relief is not carried forward, only the annual contribution allowance.


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