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  1. #1

    Pension carry forward

    Hi

    I am a bit confused about the pension carry forward rules. I will explain what i want to do so i was wondering if you can tell me if its possible:

    - This tax year (17/18) income will be around 5k say.
    - Previous tax year (16/17) income was 50k say.
    - I don't have an existing pension i contribute to and haven't contributed anything this tax year and last tax year i contributed (as did my employer at the time) for a month or two to the company pension.
    - I have a pension account from my previous employer (i can log into to see the value, its all fully invested) but not sure if i can contribute since i don't work for them (i'm unemployed now).

    My question is can i open up a SIPP say and contribute last year's x amount so i can get back some 40% and maybe 20% tax i paid? I heard i have to make use of this years allowance first, does this mean i have to contribute the 5k? Or is it 40k (as per above i did not earn that much this year, only 5k)?

    Very confused about the rules so if anyone can help that would be great.

  2. #2
    You cannot carry forward Earned Income. Note that only income from employment counts, not pensions , interest, rents etc. You can carry forward the 40 limit, but that doesnt seem to be of much use to you. So tthis tax year you are limited to 5K, as long as it is Earned.

    If you do want to contribute something you can set up a private pension - either a Personal Pension with an insurance company or a SIPP with a platform. You contribute 80% of your desired grposs contribute and the est is paid in by HMRC.

  3. #3
    No the 5k is not income from employment. So if i had no employment income this tax year, can i still contribute last years earnings (which was employment income)? If so how much?

  4. #4
    If you have no relevant earnings you can contribute 2880 to a personal pension/SIPP/stakeholder and the provider will claim tax relief of 720.

  5. #5
    Can i do that every year? And can i then add more from previous years allowance of 40k?


 

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