SIPP contributions - personal vs via Ltd Company

[Craig at Nixon Williams]

Can you use previous year's allowances if you didn't contribute the full £50,000 last year?

Yes, you can actually utilise unused allowances from the previous three pension input periods (this may not be the same as the tax year).

Also, the £50,000 previously mentioned is being reduced to £40,000 in 2014/15.

Craig

[IR35 Avoider]

Remember in this example, the maximum that you can contribute to a pension each year is £50,000.

Craig

Yes, sorry I was forgetting the limit which was introduced more recently. It is going down to £40,000 for 2014/2015

[IR35 Avoider]

In order to use unused allowance from previous years, you do actually have to have had a pension scheme then, even if you didn't contribute to it.

[Craig at Nixon Williams]

Good point!

You must also earn as much as you wish to contribute during that year.

For example - say I had unused allowances for £25,000 from the past 3 years plus my £50,000 allowance this year, I could make a contribution of £125,000 to my pension - however I must earn at least £125,000 this year in order to do this. My earnings from the previous 3 years would not count towards this.

Craig

[SteveJ]

Sounds like company contributions are the way to go, ta.