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qualifying at higher rate pension contribution

qualifying at higher rate pension contribution

A client with self employed trading income of £27,000 and net rental income of £43,000 is considering making a personal pension one of contribution of £25,000 at this time and before March1.        

Does this qualify in full for higher rate tax relief ?

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By cohen
22nd Feb 2016 17:58

Hi

Maybe - it depends on whether £25k is the net or gross contribution.

I'd recommend that you do the calculations yourself, as you'll then be able to explain it to the client.

 

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By elyob
22nd Feb 2016 23:29

The contribution is a gross contribution. Which would be net £20,000 The question is that even though the earned income would be taxed at basic rate on its own would there be tax relief granted at the higher rate on the contribution as a result of effectively non pension qualifying income

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By cohen
23rd Feb 2016 05:31

Hi

Yes - the basic rate extension applies to all income (and capital gains).

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By elyob
23rd Feb 2016 08:10

Thank you . I believed it was so but always best to check . Thanks again

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