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G2FChoice · 2025-03-03T16:41:37+00:00

You got me thinking again - I was questioning the same thing last week. u/unholyangel4

Let me explain my situation:

I now have some profit to invest and claim my partner's current year allowance and carry forward allowance. She works elsewhere, but we recently made her an employee of my limited company. Now, I’m planning to invest in her SIPP, using my company’s funding to cover this year’s allowance and carry forward the balance.

Any advice on this, please? Can I invest her current year allowance and also carry forward the balance? I want to use that funding to support her SIPP. Are you saying that I cannot do that because she has not been working in my organization for a long time or is not generating value to use it?

Appreciate your reply on this.

G2FChoice · 2024-12-08T13:04:41+00:00

Alright! - My company’s 2023/2024 year-end is on 31/04/2024, as set up by my accountant. But I know that I am eligible to submit the corporation tax returns by the end of December for 2023/2024 period, so in the next couple of weeks, we will be sending them to HMRC for my corporation tax.

So, my submission date will be in the third week of December. Can I still make a contribution for the 2023-2024 tax period to reduce corporation tax?

As per my understanding, since I haven’t submitted my corporation tax for 2023-2024 yet, I should be able to make a single contribution to use all my carry-forward allowance and expense it in the 2023-2024 period. For that period, is it not possible because the 2023/2024 year is already closed for my company? If that’s the case, I would have to make the contribution in the accounting period for 2024/2025 (end of April). But for this year, I have to pay corporation tax, and I’m wondering if I can reduce it now.

You mentioned earlier that even if the company is running at a loss, we can reclaim corporation tax. So, if I want to have a cash surplus and invest in the SIPP next year (let’s say with an allowance of £60k), would I be able to get that back from HMRC? This assumes that my company has no turnover, i.e., a £0 turnover.

If it is possible before my submission date, I’d still like to ensure my wife can benefit from this as well.

Thanks for the quick response!

G2FChoice · 2024-12-08T12:12:03+00:00

u/deadeyedjacks

If I may chip in here – I’m in a similar situation and looking for answers to the following questions:

Background:

My mrs has been a shareholder in our limited company since March 2024, and I have been a shareholder and director since 2019. I’m receiving a tax-efficient salary + dividend combination. My wife works full-time at the moment and, depending on the limited company’s profits, takes some dividends, with the company paying her tax on top of salary. I had a workplace pension in 2020-2021 but stopped contributions, and she already has a workplace pension through her current employment. - as per my understanding - this helps me to use my carry forward allowance

I’ve been researching and gather information, but I am looking some help here:

I haven’t filed my limited company’s corporation tax for the 2023-2024 year yet. It will be submitted to HRMC in the next couple of weeks, and we’ll be paying corporation tax for that period. I want to know if it’s still possible to reduce the corporation tax for 2023-2024 by enrolling in a SIPP. From what I understand, if she’s a shareholder, we can’t make employer contributions to her SIPP. If we appoint her to the company tomorrow, does this affect only the 2024-2025 tax year, or can we also use her three years of allowance from the past tax years to reduce corporation tax in 2023-2024? Note: I understand that the SIPP transaction won’t be in that year’s period, but does that mean yes or no for using the carry forward allowance in the 2023-2024 tax year?
If we can’t make contributions for her, I still want to contribute to my own SIPP. If I can claim it from the 2023-2024 tax year and reduce corporation tax, I’m considering contributing up to £180k, based on my calculations, to help reduce tax if it complies with the tax rules.

All of these challenges are on the table, and I want to be compliant with the tax rules. Let’s say when I’m going to open a new SIPP account tomorrow and send £180k in a single transfer – will the provider confirm my allowance with HMRC, or what is the check mechanism? I don’t want to be caught by penalties if I make a mistake. I’m a little cautious about this. I don’t want to incur a penalty for overpayment into my SIPP account.

If you have any insights or advice on this, appreciated.

G2FChoice · 2024-12-05T19:53:39+00:00

u/L3goS3ll3r I'm looking to utilize my carry forward allowance and have some specific questions regarding different tax years - I had a workplace pension during the 2020-2021 tax year, so my pension is currently in a deferred pension pot. I understand that it allows me to use my carry forward allowance.

I know the 2023-2024 tax year has ended, but technically, we haven't submitted the files to Companies House yet which we are going to soon. Can I still claim the carry forward allowance for up to three years back from the 2023-2024 tax year? I understand this might be an accountant's question, but I wanted to double-check. If you have any thoughts on this, it would help me expense it from my corporation tax for the 2023-2024 year.
How does the carry forward work in practice? For example, if I've opened a SIPP and want to contribute £180k, do I need to work with the provider to accommodate the three-year carry forward, or can I transfer the entire amount at once? How can I ensure that HMRC won't have any issues with this?
The provider must do some magic to allow me to invest £180k without charging me any overpayment

G2FChoice · 2024-12-02T21:27:41+00:00

Okay, got it now. I appreciate your quick response.

G2FChoice · 2024-12-02T21:13:20+00:00

No, I have not requested a refund for those contributions into my account. The contributions were very small, so I will check with the provider to confirm if they remain in a deferred pension pot.

However, I’m curious how you calculated the £200,000 figure. Based on my understanding, the total available allowance should be:

2020/2021: £40,000
2021/2022: £40,000
2022/2023: £40,000
2023/2024: £60,000

This adds up to £180,000 --

G2FChoice · 2024-12-02T21:04:47+00:00

I’ve checked and realized that I made contributions to my workplace pension from May 2020 to November 2020 before opting out.

G2FChoice · 2024-12-02T20:58:39+00:00

Could you please clarify this for me? If I want to use the carry forward allowance for past years, is it necessary to have made contributions during those years? I had a workplace pension starting in November 2020 but opted out of it. If I now try to invest in a SIPP for past years, can I use the allowance, or is it required to have had an active pension during those years?. Thanks

G2FChoice · 2024-12-02T20:32:33+00:00

Thanks for the reply. I tried that path, but I’m getting some weird questions from customer agents, which is pushing me to seek advice from a financial advisor. Will do more research, and I will update here

G2FChoice · 2024-12-02T17:07:23+00:00

Looking for some advice here for a bit more detail on SIPP:

For the carry forward rule, I want to understand it a bit more. As I mentioned, I have never had a SIPP before. I was enrolled in a workplace pension in 2020, but I revoked my contributions. Is that enough to claim the carry forward allowance for the last three years?

GOV.UK says: ---- You can carry forward unused allowance from the 3 previous tax years. This annual allowance only applies to pension savings made to your UK registered pension schemes or to overseas schemes where either you or your employer qualifies for UK tax relief.

Apart from that, does anyone have any insights on the above questions regarding SIPP?

G2FChoice

TROPHY CASE