GAP year

Just wondering if we have an expert around to confirm my theory :+1: I’m just wondering how the whole TAX contribution for SIPP works if the person in question isn’t working either at all or even in the UK for that year in question. I’m also guessing it could cover a fair few different scenarios, especially in the current environment. My concern is making contributions and then later getting a tax bill that is all.

Example
2021 normal work year
2022 travelling on gap year, at university or unemployed
2023 normal work year

If I was for example paying for kids pension when they are 16-21 and they didn’t work in one of those years do they still get the extra 20% paid in? The below is the only thing I can find and think it confirms my thoughts but just wondered if anyone could confirm it :+1:

If you don’t have earnings

If you don’t have any earnings (for example, if you don’t work) or earn less than £3,600 each year, you can make gross contributions of up to £3,600 each year to a personal pension, self-invested personal pension, or stakeholder pension receiving basic rate income tax relief at, currently, 20% on your contribution. You can pay in higher amounts than your maximum limit, but you don’t receive tax relief on the excess amounts. It’s good to remember that you may have to repay any tax relief that you have received from HMRC on these excess contributions. You also don’t receive tax relief on any payments that your employer pays into your scheme. This includes contributions that you have elected to make through salary sacrifice.

From the article you posted, it sounds like there can be contributions of up to £3600 in the gap year (assuming less than £3600 is made in this year) which will receive the 20% relief, but anything thereafter is not available for the relief.

Looks like you would then have to declare anything over the £3600 and repay the relief above this to HMRC.

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Yeah that was what I was thinking but was not 100% sure :+1: