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Time is running out in this tax-year to secure the significant tax-reliefs provided by the Government as an incentive to save in private pension arrangements.
Basic rate tax payers making a contribution of £800 will receive £200 in tax-relief, resulting in a total investment of £1,000. Individuals with earnings up £150,000 will benefit from 40% tax relief meaning the same investment of £1000 investment would cost £600. The initial £200 relief is immediately available while the additional £200 is claimed through a self-assessment return. Those who pay tax at the highest rate of 45% qualify for an extra 25% relief, over and above the basic 20% but once again this has to requested as part of the self-assessment process.
Please note these rates apply at the time of publication and are subject to change. The amount you can contribute to a private pension and the tax relief you will receive depends on your circumstances and you are recommended to seek independent financial advice from a qualified adviser.
See here for additional information on pension tax reliefs from The Pensions Advisory Service.
Please note Church House Investment Management are not tax advisers and we recommend seeking the advice of professionals in connection with personal and corporate tax strategies.