Tax information

 

This page gives you information on the following:

  • Tax and annual allowance information

  • Deemed Annual Allowance (for Carry Forward purposes)

  • Money Purchase Annual Allowance Rules

  • Lifetime Allowance

  • Death benefits

  • Stamp Duty – commercial property

  • Unauthorised Payment charges

Tax and Annual Allowance information

Below: current and historic information about the tax charges and allowances affecting SIPPs and SSAS. If you have a SIPP with us, these tax charges and allowances are explained in your SIPP Member Handbook.  If you have a SSAS with us they are explained in your Member Trustee Guide.

 

Annual Allowance*

Tax Year

Amount

2008/2009

£235,000

2009/2010 £245,000
2010/2011 £255,000
2011/2012 £50,000
2012/2013 £50,000
2013/2014 £50,000
2014/2015 £40,000

2015/2016

£40,000

2016/2017

£40,000

2017/2018

£40,000

2018/2019

£40,000

 

* For personal contributions to SIPP, as Scheme Administrator, we'll reclaim basic rate tax at 20% via Relief at Source.

If you're a higher rate taxpayer or a SSAS member, you'll need to reclaim the additional tax relief via your tax return.

 

Please note:  any contributions made in excess of your Annual Allowance will be taxed at your full marginal rate.

Your Annual Allowance is reduced if you access your benefits and trigger the Money Purchase Annual Allowance Rules (see below).

 

Deemed Annual Allowance (for Carry Forward purposes)

Tax Year

Amount

2008/2009

£50,000

2009/2010 £50,000
2010/2011 £50,000

 

Money Purchase Annual Allowance Rules*

* If you flexibly access your benefits (see “Taking your benefits” section of your SIPP Member Handbook or SSAS Member Trustee Guide) the Money Purchase Annual Allowance Rules will apply to you.  This reduces the Annual Allowance available to you for savings under money purchase pensions (but not final salary pensions).  

 

Tax Year

Amount

2015/2016

£10,000

2016/2017

£10,000

2017/2018

£4,000

2018/2019

£4,000

 


Tapered Annual Allowance 

The tapered annual allowance applied from 6th April 2016 and impacts individuals who have ‘adjusted income’ for a tax year greater than £150,000 and also exceed the ‘threshold income’ which is calculated as £150,000 less the annual allowance for the tax year.

 

The ‘adjusted income’ adds back in any pension contributions to stop individuals exchanging salary for employer contributions. This includes: 

  • Pension contributions paid gross (before tax relief) such as those paid through a ‘salary sacrifice’ agreement. 

  • Pension contributions where your pension provider has already claimed tax relief at the basic rate. 

The effect is that for every £2 of income over £150,000 the AA is reduced by £1, subject to a maximum reduction of £30,000. 


So, anyone with adjusted income of £210,000 or more and a threshold income of greater than £110,000 will have a reduced AA of £10,000 based on the current annual allowance of £40,000. 

 

Lifetime Allowance

Tax Year

Amount

2006/2007

£1,500,000

2007/2008 £1,600,000
2008/2009 £1,650,000
2009/2010 £1,750,000
2010/2011 £1,800,000
2011/2012 £1,800,000
2012/2013 £1,500,000

2013/2014

£1,500,000

2014/2015

£1,250,000

2015/2016

£1,250,000

2016/2017

£1,000,000

2017/2018

£1,000,000

2018/2019

£1,030,000

 

If you take benefits which exceed the Lifetime Allowance, the excess is subject to a tax charge which differs according to whether you take the excess as income or a lump sum as follows:

  • Income: 25% of the excess amount (income will also be taxed at your full marginal rate)

  • Lump sum: 55%

Death Benefits

Benefit type

Tax charge

Lump Sum - death before age 75

Nil

Lump Sum - death after age 75

45% 2015/16


Recipient’s marginal rate from 2016/17

Dependant's and Nominee’s Drawdown – death before age 75

Nil

Dependant's and Nominee’s Drawdown – death after age 75

Taxed as PAYE at full marginal rate

 

Stamp Duty - Commercial Property (for Freehold and for the premium on Leasehold)

 Total cost

Stamp Duty

Up to £150,000

Zero

Over £150,000 to £250,000

2% on the amount above £150,000

Over £250,000

5% on the amount above £250,000

 

Land & Buildings Transaction Tax

(This replaced Stamp Duty in Scotland from 1st April 2015)

 Total cost

Tax Rate

Up to £150,000

Zero

Over £150,000 to £350,000

3% on the amount above £150,000

Over £350,000

4.5% on the amount above £350,000

 

Land Transaction Tax

(This replaced Stamp Duty in Wales from 1st April 2018)

 Total cost

Tax Rate

Up to £150,000

Zero

Over £150,000 to £250,000

1% on the amount above £150,000

Over £250,000 to £1,000,000

5% on the amount above £250,000

Over £1,000,000

6% on the amount above £1,000,000

 

Unauthorised payment charges

 Type of tax charge

% of deemed payment

Unauthorised payment charge

40% payable by the recipient

Scheme sanction charge 40% less the unauthorised charge actually paid, subject to a minimum of 15%. It is payable by the Scheme Administrator.  It can then deducted from the SIPP or SSAS

Surcharge

(if unauthorised payment is more than 25% of scheme net value)

15% payable by the recipient

Scheme deregistration charge

(in extreme cases)

40% payable by the Scheme Administrator.  It can then be deducted from the SIPP or SSAS

 

We know pensions can be complex. Our aim is to make life easier for you, click here to view a glossary to explain some of the terminology that you may hear.

Back to top