A client has provided me with a letter from his former employer showing the following: "Severance Pay Waiver" 'You chose to use £15,000 of your severance pay to improve your retirement benefits. The funds have been applied as follows: Tax free cash £15,000'
Can anyone advise as to how this should be treated on his tax return? Is it a contribution to his pension paid gross? He is a higher rate tax payer and total income for the year is about £120,000!
The information seems ambiguous to me but perhaps I am missing something.
Replies (3)
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What kind of pension scheme is it? Does he have capacity in his annual allowance/lifetime allowance for an additional £15,000 contribution?
In which case I would say it doesn't need to go on his ITR. He has had tax relief to the extent that the gross payment has been made to his employer's scheme.