Members and their employers may contribute to the Rowanmoor SIPP and it is also possible for third parties to make contributions. Contributions made until you reach age 75 will receive tax relief, provided you (the member) satisfy tax status requirements.
Contributions can be made on behalf of a minor by others, including family members.
You may be able to obtain tax relief on contributions in excess of the annual allowance by using any unused annual allowance from the previous three qualifying tax years. This facility is called carry-forward.
There is no limit to the contributions you can make, which can include contributions from third parties, but tax relief will only be granted if you are under the age of 75 and resident in the UK. If you are or have been a Scottish resident, the tax relief you receive might be different. Contributions should be paid to the SIPP net of basic rate tax.
Tax relief will only be granted on contributions up to 100% of your earnings in any tax year and cannot be claimed by third parties, making contributions on your behalf, as they will be treated for tax purposes as if they had been paid by you. Tax relief is also limited by the annual allowance, which may include the total of the current annual allowance and any unused qualifying annual allowance carried forward from previous tax years. If you do not have earnings you may contribute up to £3,600 gross (£2,880 net) in each tax year.
We will reclaim basic rate tax relief on your behalf. If you are planning to invest or take your benefits, you should bear in mind that it can take up to eleven weeks for reclaimed basic rate tax to be received. Tax relief above the basic rate should be reclaimed via your annual self-assessment tax return.
If you benefit from contributions in excess of the annual allowance, or 100% of your earnings in a tax year, you must inform us immediately. In such circumstances you may need to declare this on your annual self-assessment tax return or other tax-related forms, to HMRC and any excess tax we have reclaimed on your behalf will need to be returned.
Employer contributions are unlimited and will receive tax relief in the year they are made, provided they are wholly and exclusively for the purposes of the employer’s trade.
If the total of your employer’s contributions plus your personal contributions exceeds the annual allowance and any unused qualifying annual allowance carried forward from previous tax years, then you will have to pay tax on it.
We will ensure that if any employer contributions, which are due, are not received in the specified time you are advised of any non-payments in line with The Pensions Regulator’s code of practice.
Is there a limit on the size of my fund?
Your total pension fund must be tested against the lifetime allowance when you take benefits and again at age 75. If the lifetime allowance is exceeded, there will be an additional lifetime allowance tax charge unless you have the necessary pension protection.
This information relates to the Rowanmoor SIPP. If you have any specific quires please contact us, email us or send your questions via the enquiry box on the right hand side. Alternatively, please visit our SIPP literature library.