🚨 HMRC Clarifies Pension Rules! 🚨
Got questions about your pension contributions? You’re not alone! A taxpayer recently reached out to HMRC after a bit of confusion about transferring £30,000 worth of shares from an employee share incentive plan (SIP) to a self-invested personal pension (SIPP) after being made redundant. 🤔
So, what’s the lowdown? Initially, HMRC confirmed that any input into a pension would count towards your annual limit, which is currently capped at £60,000. This figure has been steady since the 2023/2024 tax year, after being bumped up from £40,000. 📈
The taxpayer was curious if the £30k share transfer would count against this allowance or their total earnings for the year. HMRC clarified: it counts towards the £60,000 annual allowance and also the 100% of relevant UK earnings for tax relief. 💡
If you’re worried about getting taxed, here’s a nugget: shares held in a SIP for over five years dodge income tax and National Insurance. Plus, if you sell them after keeping them in the plan, you’ll sidestep capital gains tax too! 💰
Share this info with anyone scoping out their pension options! 💬 Have questions? Let’s chat in the comments! 🗣️
#PensionPlan #HMRC #FinanceTips #SIP #SIPP