Rolls-royce Share Discussion Threads

[barneybiggusdickus] 25/3/2024 12:32

Boeing Chief Exec leaving

[noramping] 25/3/2024 12:05

MC, I think you will be correct., I will check my online tax account once I’ve had the extra tax relief added to my sipp account

[tygarreg] 25/3/2024 11:56

Is today's pending announcement going to boost RR still further?

[noramping] 25/3/2024 11:38

GP/MC I know about the tax element, it’s more regarding what HMRC has as your taxable income online, once you get the tax back in the SIPP account do they reflect it in your taxable income?

The amounts I pay into my workplace pension means I am not a higher rate taxpayer.

[mcunliffe1] 25/3/2024 11:27

In the example Grand Plan has outlined I believe that in the case where you earn sufficient to pay at the 40% rate (or higher) you can reclaim the tax back from HMRC that equates to the difference between 25% and 40%.

I believe the pension company simply add at the basic 20% rate. Higher rate taxpayers are entitled to have the addition at the 40% rate but need to claim this.

The link explains this batter than I'd tried:

[grand plan] 25/3/2024 10:53

Noramping - if you physically pay £10k into a UK Personal Pension (or SIPP) then that will be deemed to be £12.5k gross from which you've deducted 20%. The pension company will reclaim the £2,500 and apply that into your account in a month or two. if you have earned £50k then since that's below the £50,270 basic rate band limit there will still pay 20% tax on the £50k (after deduction your £12,570 personal allowance).

If you had earned £70,000, such that £19,370 was to be taxed at 40% then the £10k net Pension contribution would shift £12.5k of your taxable income down from the 40% band to the 20% band. At the end of the day, as a 40% taxpayer, you paid £10k, your pension claims back 20% (£2,500) and you have (40% - 20%), another £2,500 knocked off your own tax bill. But on £50k per year you just benefit from the one £2,500 in your pension.

[thanatos abysss] 25/3/2024 09:18

That window tasted real nice

[thanatos abysss] 25/3/2024 09:18

Goodbye 420Nice knowing you

[noramping] 25/3/2024 09:14

MC, thanks for that, I’m PAYE employed and have a workplace pension which I lost half of due to divorce , I am putting over 50% of my wage into it now so that I can possibly retire at 60 in a few years time.
I have an old DB pension which I am waiting to transfer into a SIPP when interest rate reduce and CETV values increase, I want to transfer to a SIPP mainly so that my kids benefit if I die as a fair amount of that will be lost otherwise.
Just opened one with II , I very nearly opened one with AJ Bell but their funds coverage isn’t as good.

I’m going to take some profits from RR. and move it from my ISA to SIPP

[thegrafter] 25/3/2024 04:24

Sunak to announce 'next generation' of UK nuclear24 Mar 2024 23:41Sunak to announce 'next generation' of UK nuclear as he visits submarine shipyard in Barrowhttps://news.sky.com/story/sunak-to-announce-next-generation-of-uk-nuclear-as-he-visits-submarine-shipyard-in-barrow-13101226

[mcunliffe1] 24/3/2024 16:29

noramping: I don't live in Valencia - I live where it's colder and far, far less sunny.

I have been self-employed for 40+ years. When I paid into my pension with S.L. it was into old With Profit type policies that did not permit the aitomatic addition of tax relief. So, I would pay, say, a lump sum of £3000 into the pension (not a SIPP at that point). My accountant would include that in my tax calculations. From memory, the £3000 reduced my profits by....£3000. If that still kept me in the 40% tax bracket the in effect I would be saving 40% of that £3000 (£1200). Had I not put any money into my pension my profits would be the £3k higher and hence I would pay £1200 tax.

Generally speaking, I would put lump sums into my pension to get my overall profit down to the standard tax rates.

Towards my retirement, when I had only a couple of customers still using my software and paying me support fees (of very little) my profits were zero and more often than not I was in a loss when costs, depreciation etc etc were calculated. So, my pension payments were not saving me tax and given they were heritage type pensions I was not getting the 20% basic rate added to the investment amounts.

I changed to different funds in the S.Life - one that would automatically add the 20% to my premiums being paid in. So, every month I would pay, say, £200 into the pension as a transfer from my bank (Standing Order). The S.L. would add to this £40 - being 20% - and I would have £240 going into the pension fund. This was added at the same time as my contribution.

I no longer work, fully retired. I no longer pay into my pension so receive no basic 20% uplift. I could do that, to a max. of £2880 of my own money to which £720 would be added by HMRC giving the max of £3600. the £720 being 20% of the £3600


So, if I were a divorce judge I would consider your payments into your pension to be voluntary and therefore not deductible from your gross earnings. You would pay more tax on your gross earnings as a consequence of not paying into a pension so that would reduce your net earnings.

I'd say your pension payments are deemed to be made AFTER having been taxed. So the government are repaying your tax paid by adding to your pension contribution. For that reason I would expect you could not influence your eventual maintenance by pension payments.


An interesting thought here: when I had a casual chat with an investment advisor who was the brother of my accountant I put a suggestion to him as follows:

I have a £200k SIPP in my name. Been married for 46 years. My wife cannot draw-down from my pot and yet in real terms she's helped to fund that pot as we share all finances. Until she started getting her state pension she earned nothing so her tax allowance of £12,570 was unused (well 90% of it was).

If we divorced and agreed that she was entitled to 50% of my pension the judge would probably agree with that. We then cohabit and each draw-down from our £100k pots. I pay less tax now and she still pays nothing until later when she gets the State Pension. The Investment guy saw no flaw in that logic.

The wife wasn't on board however :-)

[noramping] 24/3/2024 13:32

It’s not about CGT , it’s about taxable income, my investments are in tax free wrappers in works pension and shares ISA’s.

Its with regards maintenance after divorce?, the lower my taxable income, the lower my maintenance payments.

[eeza] 24/3/2024 12:47

I used to use this site for CGT, before retirement.

[cevodniya] 24/3/2024 12:33

noramping, I can't help you on this one mate, as I have lived in Valencia Spain for the past 14 yrs and I have no idea re HMRC tax procedures.
I'm sure Google can answer your question

[noramping] 24/3/2024 12:10

Cev, MC , I know it can take a month or 2 before the tax relief is added to your account in a SIPP , does that tax relief automatically get reflected on your HMRC earnings.

So if for instance I put £10K in a SIPP , would my next HMRC earnings show my earnings as £10K less and my tax paid have the sipp tax relief removed.

Ie. If say PAYE earn £50K and paid £10K in tax , would £10K paid into a SIPP reduce my HMRC earnings to £40k and tax paid to £7.5k ?

[thegrafter] 24/3/2024 06:36

More bad PR for Boeing !! Soon no one will want to fly on them and that could take a while to go away !

[blueball] 23/3/2024 20:24

Comment from Peter Conkers.