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Peter’s wife,Catherine, is employed by Peter’s partnership. She is paid an annual salary of £290,000 in thet ax year 2021/22.She pays10% of her salary in to her employer’s occupational pension scheme and her employer(the partnership) pays a further 5% into the same scheme. Catherine also made a gross contribution into a personal pension scheme in the tax year of £10,000. They jointly own a property and has generated £67000 as profits.
What is Catherine’s Annual Allowance?In the solution 290000*10% pension is deducted and Catherine’s and employer’s contribution to occupational pension (10%+5%)×£290,000 is added to the adjusted income. Can you please explain why?
BPP Workbook-Pensions-Activity 4
Employment Income(290000-10%*290000) 261000
property Business Income 33500
Net Income 294500
Catherine and employers contribution 43500
to occupational pension scheme
Adjusted Income 338000
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