adding to a SIPP

[mutantpoodle]

I am in receipt of various pensions
most are rubbish small ones
but i do reach taxpayer level and pay at basic rate

I have an untouched SIPP which the plan is to leave to beneficiaries if die before 75

(obviously above subject no government messing about)

am I allowed to add to my SIPP from my existing assets even though I am already in receipt of other pensions?

the way I read things I am able to add £2800 (ish) and it will be topped up by taxman???

[mc2fool]

am I allowed to add to my SIPP from my existing assets even though I am already in receipt of other pensions?

the way I read things I am able to add £2800 (ish) and it will be topped up by taxman???

Yes, you can add £2,880 each year (up to 75) which will get topped up to £3,600. If you happen to get close to being a higher rate taxpayer then declare that on your self assessment and the HRT threshold for you will get raised by £3,600 (effectively giving you 20% relief on up to that amount).

[mutantpoodle]

many thanks that reply
so i can send money to the SIPP provider and he does all the rest
I do not have to declare or advise HMRC anywhere at all,,,,,,,,,???

you had me a bit concerned talking about HRT...........but a quick think relaxed me as its different HRT

[mc2fool]

many thanks that reply
so i can send money to the SIPP provider and he does all the rest
I do not have to declare or advise HMRC anywhere at all,,,,,,,,,???

Correct. But, as I say, if you're getting close to the higher rate tax threshold it is to your advantage to declare that £3600 gross on your self assessment (but HMRC won't care if you don't!).

[DrBunsenHoneydew]

I note your reference to age 75.
Is that because of the freedom from income tax in the hands of the beneficiary?
If so, note this rule is proposed for abolition, so tax payable regardless of your age at death.

[mc2fool]

I note your reference to age 75.
Is that because of the freedom from income tax in the hands of the beneficiary?
If so, note this rule is proposed for abolition, so tax payable regardless of your age at death.

Dunno about the motivation for the rule, but to be clear, in the context of this discussion what stops at 75 is the tax relief on pension contributions. Up to 74 you can add £2,880 to your SIPP and it will get topped up to £3,600, but from 75 onwards it won't. I haven't heard that that will change.

Note that while in theory you can bung as much as you like into a SIPP and it's only the amount up to your relevant earnings/£60K/£3,600 that is eligible for relief, some SIPP providers just don't allow you to put in non-relievable amounts (it probably confuses their computers!).

[mutantpoodle]

I note your reference to age 75.
Is that because of the freedom from income tax in the hands of the beneficiary?
If so, note this rule is proposed for abolition, so tax payable regardless of your age at death.

yes noted but as siid in orig post its subject no government messing about with curremt permissions

[mutantpoodle]

AND.........
thanks everyone
while on this subject...is this similar to the annual gift allowance £3000 where you double up if didnt use it previous year???

[ursaminortaur]

AND.........
thanks everyone
while on this subject...is this similar to the annual gift allowance £3000 where you double up if didnt use it previous year???

1) Triggering the MPAA stops you using carry-forward.
2).To carry-forward unused allowances from the previous three years you must first use up this year's annual allowance.
3). Your earnings this year have to be enough to cover the contribution.

Hence you can only use carry-forward if you have relevant earnings over £60,000 this year, have unused annual allowances from the last three years and haven't triggered the MPAA. In particular you can't use carry-forward to make multiple £2,800 payments when you have no earnings (or earnings less than £3600 gross) this year since your earnings are less than the annual allowance of £60,000.

[mutantpoodle]

ok so i Googled MPAA

and although I have other penions my SIPP is untouched

my earnings are less than 60000...being pensions and investment income
I have used my 2023 allowance of 2880
I have not paid into this SIPP before, or any other pension in past 5 years (longer but..)

so can i pay in more now in respect previous years...and is it 3 years like the gift allowance

[Urbandreamer]

so can i pay in more now in respect previous years...and is it 3 years like the gift allowance

There is a "gotcha" about that.
You can only pay in up to your earnings in a given year.

So no income or contributions for three years, you have 3 * £40k allowance in theory.
But if your earnings are £20k, then £20k is all that you can pay into your SIPP.

[swill453]

so can i pay in more now in respect previous years...and is it 3 years like the gift allowance

There is a "gotcha" about that.
You can only pay in up to your earnings in a given year.

So no income or contributions for three years, you have 3 * £40k allowance in theory.
But if your earnings are £20k, then £20k is all that you can pay into your SIPP.

And if all earnings are investment and pension income, they don't count.

So the net £2880 is all you can pay in.

Scott.

[Urbandreamer]

There is a "gotcha" about that.
You can only pay in up to your earnings in a given year.

So no income or contributions for three years, you have 3 * £40k allowance in theory.
But if your earnings are £20k, then £20k is all that you can pay into your SIPP.

And if all earnings are investment and pension income, they don't count.

So the net £2880 is all you can pay in.

Scott.

Hence why I used the word "earnings" rather than "income".

[swill453]

And if all earnings are investment and pension income, they don't count.

So the net £2880 is all you can pay in.

Hence why I used the word "earnings" rather than "income".

Mutantpoodle has already said "my earnings are less than 60000...being pensions and investment income" so probably best to explicitly clarify the confusion.

Scott.

[mutantpoodle]

And if all earnings are investment and pension income, they don't count.

So the net £2880 is all you can pay in.

Scott.

looks like a max of 2880

unfiortunately I am not an 'earner' so all is 'income

but many thanks for clarifications, I thought it best to ask!!