Adjusted net income and pension contributions
Jimbo
Member
Morning,
Would be very grateful for any thoughts on this....
Can you exceed your annual allowance and accept paying annual allowance charge to reduce adjusted net income below £100k?
Bit of background, someone earns circa £140k, has two children, been receiving childcare hours and tax free child care, so this provides significant value. Bonus is higher than expected, so using up full annual allowance and carry forward their adjusted net income is still going to be about £102k.
Thoughts are, they could make a £2,001 charity donation or could they make a £2,001 gross pension contribution to their SIPP (there company won't allow ad hoc/bonus sacrifice) and just accept they will pay the annual allowance charge on this £2,001 yet still keep all the benefits they have received from Gov for childcare as their adjusted net income is now £99,999?
Thanks to anyone who can provide any help! 
Comments
*Their company - apologies
Yes, annual allowance rules and pension tax relief rules work autonomously (but are inter-related)
Thank you!