The Future of Pensions Advice: Part 3 – ‘Tax Relief, Annual Allowance and a pair of pension tax tools’

Check your answers

1. Gillian’s income from the tax year is made up of £95,000 salary, £1,000 of bank interest and £10,000 dividends. She makes a net relief at source pension contribution of £5,000 to her personal pension.

a. Gillian’s “adjusted net income” is £99,750 and she has a personal allowance of £12,570

b. Gillian’s “adjusted net income” is £101,000 and she has a personal allowance of £12,000

c. Gillian’s “adjusted net income” is £104,000 and she has a personal allowance of £10,570

d. Gillian’s “adjusted net income” is £106,000 and she has a personal allowance of £9,570


2. Andrew earns a salary of £30,000 p.a. He currently contributes 5% of his salary into his employer’s pension scheme under a net pay arrangement. His employer matches Andrew’s contributions. How much more can Andrew contribute personally and receive tax relief without suffering an AA charge?

a. £27,000

b. £28,500

c. £30,000

d. £37,000


3. Simon is a director of his own ltd company. He takes a salary of £10,000 each year from the business along with dividends up to the higher rate threshold.

What is the maximum personal tax relievable pension contribution that Simon can make?

a. £3,600

b. £10,000

c. £40,000

d. £160,000


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