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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Pension contributions are a most effective method of tax reduction. Current rules allow you to put 40K per annum or 100% of salary, whichever is the less. If you use a SSIP you can go back three years to mop up unused contributions. Rental Income and Dividends do not form part on income against which pension contributions can be offset.
I do hope that you have found my reply of assistance.
Sorry for the typo, I meant a SIPP [Self invested Personal Pension]! You can read all about them here:
Pension contributions by you will reduce your taxable income. Remember that if you are mopping up earlier year levels then prior years computations will be affected. If you can reduce your taxable income below the 100K level then the Personal Allowance (PA), currently 11.5K, will reappear and reduce your tax liability further.
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