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Where Taxpayers and Advisers Meet

Higher rate for first time, looking at a SIPP?

chrisbaker
Posts:1
Joined:Thu Nov 01, 2018 10:56 pm
Higher rate for first time, looking at a SIPP?

Postby chrisbaker » Thu Nov 01, 2018 11:02 pm

Hi,
I'm going to cross into higher rate tax, and above £50k so will start losing child benefit.
I anticipate this possibly being a one-off, as it's due to a bonus, which may not be repeated.

I calculate my total income as £53,750.
I'm considering putting £4,000 into a pension, to bring me below the £50k and avoiding child benefit. I'm looking at a SIPP with AJ Bell as the charges are lower than my auto-enroll (Now Pension).

Does that idea work out? I understand I'll need to then do a self-assessment, is this easy enough to DIY, or should I be seeking out someone to do it, if so who? I've spoken to a financial adviser on advice of a friend, but it was quite a hard sell and not what I think I need.

Is there anything else/different I should be doing?

Thanks for your help!

D&C
Posts:61
Joined:Thu Dec 22, 2016 10:04 pm

Re: Higher rate for first time, looking at a SIPP?

Postby D&C » Sat Nov 03, 2018 12:00 am

I calculate my total income as £53,750.
I'm considering putting £4,000 into a pension, to bring me below the £50k and avoiding child benefit.
High Income Child Benefit Charge is based on "adjusted net income" so your plan may well work and you would also be very likely to be entitled to high higher rate tax relief on the pension contribution.

You might want to Google adjusted net income though and look at that in more detail as there are other things you may need to include (or deduct) as part of your calculation.

Also, paying £4,000 into a personal pension or SIPP will attract £1,000 basic rate relief making a £5,000 gross contribution - is that what you intended?


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