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Contributions

Q. Is stamp duty payable when an investment is transferred into a pension scheme as an in-specie contribution?

Yes, if applicable. Where the investments being transferred in arise from an employee share scheme then stamp duty may not be payable.

As the transfer to the pension scheme will be treated as a disposal, capital gains tax may also be payable.

Q. How much can I contribute in a tax year?

You can actually contribute as much as you like, but there is a limit on the amount of tax relief that you can receive.

In any tax year you can contribute up to 100% of your 'relevant UK earnings' (which is any taxable employment income or chargeable income derived from a trade, profession or vocation you receive in a tax year) and get tax relief on those contributions (prior to your 75th birthday). This is an aggregate limit for all tax approved registered pension schemes of which you are a member.

There is no cap on the level of taxable earnings you receive in a tax year that count as 'relevant UK earnings'. In addition, any contribution your employer makes will not count towards your own personal contribution tax relief limit. However, there is an Annual Allowance for each tax year. Any tax relievable contributions you make to a registered pension scheme, or any your employer make, count towards this Annual Allowance. If you exceed the Annual Allowance in any tax year you will become liable to a tax charge on the excess at your marginal rate.

If your 'relevant UK earnings' are less than £3,600 in a tax year you can contribute up to this amount and get tax relief (prior to your 75th birthday).

Q. What is the Annual Allowance?

The Annual Allowance is the upper limit on the amount of tax privileges on contributions made by, or in respect of, an individual in a tax year to registered pension schemes.

The Annual Allowance for the 2012 /13 tax year is £50,000.

Q. How do I get tax relief on my contributions?

Any contribution you make personally should be made net of basic rate tax relief (20% in 201 2/13 ). We will claim the basic rate relief due directly from HM Revenue & Customs and add this to your SIPP fund when received. It can take up to eight weeks for tax relief to be received.

If you are a higher rate taxpayer, you can claim the excess tax relief due through your Self-Assessment tax return or by making an earlier separate claim with your tax office.

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