income tax and pensions

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    income tax and pensions

    Hi All,
    In the next few weeks i will see a couple of IFA but would like abit of advice/information beforehand (to give the impression i know what i am talking about!). I have never had a private or works pension before and i am now 50. As i am now paying income tax through property income apparently if i take out a private pension i can off-set this against paying tax. Surely, i cant off-set all of it, can i? If i know roughly how much income tax i will be paying in the future e.g £5,00 to £10,000 a year can all this amount go into a pension. Any other advice would be appreciated.

    #2
    why are you so concerned with giving the impression you know what youre talking about? why not let the professionals guide you though it? a wise step to see more than one, that way you can research their advice separately AFTER the appointments

    the problem with trying to look as though you understand everything is that they might miss something important, thinking you understand!!!

    there are plenty of sites out there with info on pension contributions etc. I would suggest you consider buying commercial properties to let as opposed to just putting your money into a pension company!

    Comment


      #3
      Unless you also have paid employment, I believe you are limited to £3600 before tax contribution a year.

      Comment


        #4
        Broadly speaking, pension contributions are tax free, so if you contribute to a pension (up to a maximum) you can claim the income tax back - but only as part of your pension.

        Let's say you were taxed at 20% on some income.
        If you contribute £80 to your pension, HMRC will contribute the £20 you paid in tax into your pension fund.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          If you are working you can add up to 100% of your income into a pension fund.

          If you are not working, you are limited to £3600 per year.

          Comment


            #6
            Note that income from property investment is investment income and a) doesn't count as working and b) doesn't count as "wages/salary".
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              To the best of my knowledge , the net rental income declared after all allowances is what you received and subsequently declared as your personal income to HMRC through your personal Self Assessment , in turn any contributions made benefit from tax relief at your assessed prevailing rate of tax. You are right to speak with an Independent Financial Advisor for guidance , brokers now focus on professional advice for which you will be expected to pay a fee , before the meeting , establish if theu are offering an initial Free Consultation followed by advice for which they would expect you to pay "x" amount. From painful personal experience avoid any brokerage that is limited to advising on their own companies products , such as SJP and the like , you need independent advice and not one where the advisor has targets to achieve and if successful can getS rewarded by attending the companies Annual Convention at some luxurious location abroad all expenses paid ( who pays for it is your guess) If you are not satisfied go to the Institute of Financial Advisors and find a local advisor who meets your expectations.

              Comment


                #8
                If you have no "UK relevant earnings" (e.g. all income is from investments) then the maximum TAX RELIEF is restricted to a gross pension contribution of £3600.

                You may be able to pay more than £3600, but no tax relief will be available.

                Comment


                  #9
                  I am sure there will be a way around it if you want to pay more than 3600 and get appropriate tax relief, but I bet its possible !!!

                  Comment

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