You are reading a single comment by @Pantsmaster and its replies.
Click here to read the full conversation.
-
As far as I understand it, and how I have managed this with a Hargreaves SIPP is that I would put in 4K, HL claim 1K on my behalf a few weeks later making total contribution of 5K, the in your tax return you declare the contribution you made and receive 1K rebate, so cost to you to put 5K of your higher rate taxable salary in SIPP is 3K (eventually)
-
If possible, do it as a salary sacrifice. Then you and your employer save on NI. If they are really nice they might add the NI they saved as an extra contribution.
Not sure of the answer to your actual question though.
user116219
cjr
@Pantsmaster
Someone help me figure out tax relief on post-tax pension payments?
Higher rate threshold is currently £50271. If a taxable salary (i.e. after workplace SS pension contributions) was, say, £55271, you would be paying the 40% rate on that £5k over the threshold.
If you wanted to "maximise" your tax saving i.e. bring yourself below the 40% rate threshold but not contribute more than you need to to achieve that, would you contribute £5000 to a SIPP? Or is it £4000 because of the basic rate relief you get? I'm getting different answers from different online calculators. I think I'm confused because the relief you get is a combination of extra money that goes into the SIPP automatically, and a refund on the paid tax.