I thought I was easing towards an understanding of recycling of PCLS cash, but I've now seen that it's based on a single (the latest?) PCLS rather than the sum of all PCLS received in a 12 month period. I'm now worried that I may be in breach of the rules already, on the basis of last year's SIPP contribution, & hoping someone can ease my concerns please.
It boils down to whether a SIPP contribution is based on gross (after it's been boosted by 25% by the govt in the SIPP) or nett (the cash I'd pay in to the SIPP before it gets boosted).
The PCLS payment in question is £90,000 from a defined benefit scheme. When HMRC (et al) talk about contributions of below 30% of PCLS being out of scope for recycling rules, does that £27k limit mean:
1) As long as I put below £27k cash in to a SIPP (nett) then it's OK
2) As long as I put below £21.6 cash in to a SIPP (that then gets made up to £27k automatically/gross) then it's all clear
I also have a SIPP and I was hoping that the PCLS from that, combined with the DB PCLS, would mean that the distinction between nett & gross contributions would be purely academic, but that hope seems to have been dashed.
I realise this is getting in to fine details, but that's where the devil lives and I don't want to incur his ire. Not when that could knock 75% out of the PCLS
TIA
Bob
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pension recycling - nett Vs gross
Re: pension recycling - nett Vs gross
Interactive Investor to the rescue (again). Hopefully it will help someone further down the track
Thank you for your secure message.
Should you make a Personal net contribution and tax relief is added, the Contribution is viewed as including the tax relief.
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