Pension Contributions & Tax Credits

Pension Contributions & Tax Credits

Didn't find your answer?

I believe I cannot claim higher rate tax relief on my tax return for the contributions I make into my children's pensions - PLEASE correct me if I am wrong!! However, can I claim them as a deduction from income for Tax Credit purposes?

If the answer is no, then what would happen if I paid into my husband's pension? Would he, as joint claimant, be able to offset it, or would the relief be lost?
d painter

Replies (1)

Please login or register to join the discussion.

avatar
By AnonymousUser
16th May 2005 17:21

Suggested Response
I do not have any practical experience and so would welcome comments from others with practical experience or who know of anything I have missed.

s639 allows tax relief for all payments to personal pension arrangements made by that individual. If you established the scheme on behalf of your children, you might like to check whether you signed as guardian for your child (in which case they should be deemed to have established it), or in your own name with them as a beneficiary. Otherwise I cannot see how you coul obtain higher rate relief for these contributions.

Re child tax credits, I do not know. However, these generally follow IT rules unless explicitly amended (eg exclusion of many benefits in kind).

I am not sure what you mean when you talk about a joint claimant. I have not come across a joint pension arrangement. I would expect that each personal pension arrangement would be one individual's scheme even though widow(er)'s benefits or division on divorce might make a spouse a potential beneficiary.

Have you considered treating pension payments 6/4/05 to 31/1/06 as paid to your own scheme in year to 5/4/05? This does allow relief at 40% and the tax credit benefit. Of course this is limited to the maximum contributions for 2004/5 less those paid in 2004/5 and not treated as paid in 2003/4.

Thanks (0)