Question
Mary currently has no earned income but has a high level of savings income. She wants to continue to pay into the personal pension plan
Mary currently has no earned income but has a high level of savings income.
She wants to continue to pay into the personal pension plan that she set up
and paid into when she was working.
Marys husband, Harry, is employed and has a personal pension scheme. He
has an annual income of 90,000.
Both Mary and Harry intend to pay as much as possible into their pension
funds each tax year.
Harry is looking for a tax efficient investment as he says he is not happy
paying higher rate tax.
Requirement:
Explain the gross maximum tax relievable pension contributions Mary and
Harry can make, outlining the method of tax relief in each case.
Clarify whether Harry is a higher rate taxpayer and suggest three investments
that he could make to allow tax free income.
(maximum word count 200 words)
You should assume the tax rates for 2019/20 continue to apply in the future.
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