Hi everyone
Seeking help trying to calculate the amount
Pension taper kicks in at £240k.
Can someone confirm if I am getting the calculation right - particularly with regards the Personal SIPP Contribution and whether I need to add on the £3k the govermnent adds to this contribution)?
Example figures.
Salary : £220k
Employer Pension Contribution : £22k
Personal SIPP Contribution (£1k per month) : £12k
Dividend Income : £1k
Interest Income : £0.1k
Total : £255.1k so taper will come into effect.
TIA
Del
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Pension Taper Calculation
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- Lemon Pip
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- Lemon Slice
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Re: Pension Taper Calculation
You need to distinguish your threshold income from your adjusted income.
You might find this helpful
https://adviser.royallondon.com/technic ... h-incomes/
Or this
https://www.pruadviser.co.uk/knowledge- ... allowance/
Although it applied when the numbers were different I found this useful when a nephew sought my wisdom. It might pay to start with this and then meet the updated numbers in the two links above.
https://3652daysblog.wordpress.com/2018 ... nce-taper/
You might find this helpful
https://adviser.royallondon.com/technic ... h-incomes/
Or this
https://www.pruadviser.co.uk/knowledge- ... allowance/
Although it applied when the numbers were different I found this useful when a nephew sought my wisdom. It might pay to start with this and then meet the updated numbers in the two links above.
https://3652daysblog.wordpress.com/2018 ... nce-taper/
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- Lemon Quarter
- Posts: 1808
- Joined: November 13th, 2016, 3:41 pm
- Has thanked: 1414 times
- Been thanked: 652 times
Re: Pension Taper Calculation
Yes, the SIPP contribution is the amount gross of basic rate tax, so £15k in your example.
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- Lemon Pip
- Posts: 63
- Joined: November 22nd, 2016, 7:01 am
- Has thanked: 54 times
- Been thanked: 5 times
Re: Pension Taper Calculation
Thanks guys - so let me 'spli't these into the threshold and adjusted income and try again - it may help others searching for this. Can you have a look and see if I have it right.
Threshold Income
Salary : £220k
Dividend Income : £1k
Interest Income : £0.1k
Income = £221.1k
MINUS
Personal SIPP Contribution (£1k per month) : £12k = £15k Gross
Total : £206.1k so taper will come into effect.
Adjusted Income
Salary : £220k
Dividend Income : £1k
Interest Income : £0.1k
PLUS
Employer Pension Contribution : £22k
Total : £243.1k so taper will come into effect.
Taper = Amount over £240k / 2 = £3.1k / 2 = £1.55k
Maximum Pension Contribution = £40k - £1.55k = £38.45k
Threshold Income
Salary : £220k
Dividend Income : £1k
Interest Income : £0.1k
Income = £221.1k
MINUS
Personal SIPP Contribution (£1k per month) : £12k = £15k Gross
Total : £206.1k so taper will come into effect.
Adjusted Income
Salary : £220k
Dividend Income : £1k
Interest Income : £0.1k
PLUS
Employer Pension Contribution : £22k
Total : £243.1k so taper will come into effect.
Taper = Amount over £240k / 2 = £3.1k / 2 = £1.55k
Maximum Pension Contribution = £40k - £1.55k = £38.45k
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