The Lemon Fool

I've got a lump sum that's bigger then my (higher-rate) earnings this year, but I'd like to pay it into my SIPP anyway (ISA is maxed out, dealing account might mean future CGT perhaps).

So do I pay it in, write to HMRC to claim the higher-rate rebate on the amount up to my earnings, and also point out that I paid more than that so ask them to please bill me for what (presumably) the SIPP provider will give me above that?

I looked this a while ago, I thought I had paid in more than I should but I luckily had miscalculated. I found this from AJ Bell
https://www.ajbell.co.uk/sites/default/ ... e_pays.pdf

Forgive the thread piggybacking here but I had a similar question regarding paying into a SIPP directly from my business (I.e. employer contribution).

I'm looking at a £60k annual contribution plus a £40k carryback, which far exceeds what I will be taking in salary and dividends.

Do I need tax advice to be sure that is acceptable?

Thanks.

neversay wrote:I'm looking at a £60k annual contribution plus a £40k carryback, which far exceeds what I will be taking in salary and dividends.

Do I need tax advice to be sure that is acceptable?

Ignoring the lifetime allowance for a second, I believe you can contribute any amount into a pension per year, but if you put more in that you earned (or will earn?) in that tax year, then you have to declare that and pay any over-paid rebate back HMRC. There is no "punishment" for paying more in though if that's what you mean?

Assuming, like me, you want to exceed the rebatable limit because either your ISA is maxed out or you just want it invested in stuff that happens to be in your pension, then I think you can just do that without the need to take advice (beyond which figures to give on the relevant self assessment form).

I had a limited company and made company contributions into my SIPP. I sometimes used the entire annual allowance up + additional from previous years.
As it's a company contribution then the limits re: salary don't apply. You just need to stick within the annual contribution limit (+ additional unused years contributions).

That's very helpful @y0rkiebar, @joey and @Gilgongo. Thank you!

Gilgongo wrote:I'
So do I pay it in, write to HMRC to claim the higher-rate rebate on the amount up to my earnings, and also point out that I paid more than that so ask them to please bill me for what (presumably) the SIPP provider will give me above that?

neversay wrote:Do I need tax advice to be sure that is acceptable?

I'm certainly not qualified to give advice, but aren't you both overthinking?

If you enter all the relevant figures in a self-assessment tax return, surely it'll all come out in the wash? Avoiding the perhaps-rather-high risk of misunderstanding if you try and communicate your situation with your own explanation?

I'd be more concerned about the likelihood of adverse overall tax implications on withdrawing from the SIPP, or if you hit the lifetime limit!