HRT Pension Relief via Tax Code
arongunningham
Member
If you are entitled to claim a further £1,000 pension relief and you opt to do this via tax-code adjustment, the tax-code would be adjusted by £2,500 (relief x100/40).
Does anyone understand the logic behind this? I assume it's meant to be the same amount of relief (£1,000) once it's all washed through?
Comments
I've got my head around the maths, it was a eureka moment whilst walking the dog.
If your tax code allows £2,500 of higher-rate income to be tax-free £2,500 x 40% = £1,000.
It's a bit embarrassing I couldn't figure that out straight away!