SSIA to Pension

dangerhere

Registered User
Messages
83
What restrictions if any are in place to stop someone putting in their full percentage allowable into their pension at the high rate and in addition claiming the SSIA exemption of 2500 for 7500 Euro?
 
Hi,
There is nothing to stop you doing this - the only proviso is the Pensions Incentive Tax Credit is only available for those earning less than 50K gross for 2006.
Hope this helps
M.
 
Is [broken link removed] any use?
 
I think the legislation states that a declaration needs to be signed by the pension scheme member to confirm that you dont claim both. Its one or the other.
 
If you can gain relief at the marginal rate this is a better financial option than SSIA to Pension transfer in any event (hence the criticism of the "incentive" / poor take-up)- wait until next year / backdate contribution to last year?
 
If you can gain relief at the marginal rate this is a better financial option than SSIA to Pension transfer in any event (hence the criticism of the "incentive" / poor take-up)- wait until next year / backdate contribution to last year?
But even high rate taxpayers who are already maximising their annual relief can surely benefit from this and there are still many people on 20% who can also benefit?
 
Yes - high rate taxpayers who are maximising their contributions can benefit BUT if they are funding an income in retirement that will cause them to suffer marginal rate tax then they are effectively getting relief at a lower rate and suffering tax at a higher rate. Pensions a means of tax deferral - no more no less.

For standard rate taxpayers it is of some benefit (but the poster was not such an individual).
 
Previous post is overlooking a few points:

(1)For most people transferring their SSIA to pension, they will be accessing 25% of fund tax free so they will not be paying marginal rate on all of the proceeds.

(2)All investment growth on the funds over the period is tax exempt because it is in a pension investment - this is a very valuable break over the longer term.

(3)Personal tax bands are far higher for individuals aged > 65, so they should be able to fund quite a significant income (post retirement) before that income would be hit by marginal tax.
 
BUT if they are funding an income in retirement that will cause them to suffer marginal rate tax
What do you mean by this? Do you mean that if their pension income is such that they will pay high rate tax on it...? Don't forget about the 25% tax free lump sum that they can take.

Sorry - only read CapitalCCC's comments after posting.
 
I am not suggesting that it doesn't make sense, but rather than there are options that may make more sense particularly for a marginal rate taxpayer.