| As there was no 2019 Budget – given the General Election being called, we thought we should provide a ‘reminder’ to our clients in respect of claiming Pension Tax Relief.We must always recommend Pension holders speak to their specialist Tax Advisers in relation to tax matters.
Reporting Annual Allowance Charge You may have recently received a pension saving statement from your Pension Scheme Provider. These statements must be issued automatically when a pension scheme member’s pension ‘input’ to a scheme in the previous tax year exceeded the
The deadline for Pension providers issuing automatic pension savings statements for the 2018/19 tax year was 6 October 2019. It is worth remembering the tapered annual allowance that applies to high earners isn’t taken into consideration when issuing these statements. So a high earner may have an annual allowance charge to pay because they exceeded their available annual allowance for the previous tax year but won’t have been sent a pension savings statement automatically (unless one of the other conditions above applies). Additionally, a pension holder who made a pension payment into more than one pension scheme may have had a total pension input that exceeded the annual allowance, or money purchase annual allowance but won’t have been sent a pension savings statement automatically if their pension input into a single scheme didn’t exceed the relevant allowance. (This is a point to be aware of!). Where a pension holders tax adviser requires it, we will ask a Pension Provider to send a pension savings statement, where they haven’t received one automatically, to help work out if a charge is due or not! Receipt of an automatic pension saving statement doesn’t necessarily mean that a pension holder will have an annual allowance charge to pay. The reason for this is the pension holder may be able to make use of the carry forward rules, using up ‘unused’ annual allowance from the previous three tax years, to avoid the tax charge. If a pension investor does have an annual allowance charge to pay before the 2018/19 tax year, you will need to report the position to HMRC through their Self Assessment return and pay the charge by 31 January 2020. If certain conditions are met, some investors may be able to use the ‘Scheme pays’ facility and the pension tax charge could be paid from their pension pot. Claiming additional pension tax relief Remember, investors who make contributions to personal pensions, other than through salary sacrifice and pays income tax on their earnings of more than the basic rate (currently 20% across the whole of the UK) need to claim any additional tax relief due to them from HMRC. This can be done by making a claim through Self Assessment Tax Return or by notifying their local tax office – attaching the contribution certificate. As always, we are here to support our clients so if you have an ‘advice question’ simply get in touch. We are here to provide the Best Price for the best investments. BestPriceFS = best invest For further reading click to read our blog pages – https://www.bestpricefs.co.uk/blog/ Warmest Regards. Richard and the Best Price FS Team |