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Claiming a deduction for your pension contributions

​​​​​​​Paying into a pension scheme

There is no limit to the amount you can pay into your pension fund.

Pension​ contributions and tax relief

The maximum tax relief is the lower of:

  • Your total pension contribution(s)
  • £50,000 less any excess
  • your relevant earnings less any excess

Jersey pension scheme tax guide: glossary of terms​

An excess is calculated if your total income is more than £150,000.

Total income for this purpose is defined in Article 4 of the Income Tax Law. This ignores the total of:

  • pension contributions
  • interest payments for your main residence
  • any ordinary annual contributions

Example 1

​An individual has total earnings of £180,000 and has deductions for the following​£
​Subscriptions​500
​Interest payments for main residence12,000
​Lump sum donation to Jersey charity​5,000
​Employment pension contributions​14,000
​Private pension contributions​30,000

​To calculate the pension relief restriction

​Total income​180,000
​less subscriptions and donation​(5,500)
​174,500
​Excess (£174,500 - £150,000) = £24,500

Pension relief is the lower of:

  1. £44,000 (actual pension contributions)
  2. £25,500 (£50,000 less excess £24,500)
  3. £155,000 (relevant earnings £179,500 less excess £24,500)

Pension relief = £25,500

Example 2

​An individual has salary or business profits of £100,000 and has investment income of £60,000​£
​Pension contributions​50,000

​To calculate the pension relief restriction

​Total income​160,000
​Excess (£160,000 - £150,000) = £10,000

Pension relief is the lower of:

  1. £50,000 (actual pension contributions)
  2. £40,000 (£50,000 less excess £10,000)
  3. £90,000 (relevant earnings £100,000 less excess £10,000)

Pension relief = £40,000

Example 3

​An individual has salary or business profits of £150,000 and has investment income of £50,000​£
​Pension contributions​50,000

​To calculate the pension relief restriction

​Total income​200,000
​Excess (£200,000 - £150,000) = £50,000

Pension relief is the lower of:

  1. £50,000 (actual pension contributions)
  2. £0 (£50,000 less excess £50,000)
  3. £100,000 (relevant earnings £150,000 less excess £50,000)

Pension relief = £0

Example 4

An individual has salary or business profits of £160,000 and has net property income of £10,000​£
​Pension contributions​20,000

​To calculate the pension relief restriction

​Total income​170,000
​Excess (£170,000 - £150,000) = £20,000

Pension relief is the lower of:

  1. £20,000 (actual pension contributions)
  2. £30,000 (£50,000 less excess £20,000)
  3. £140,000 (relevant earnings £160,000 less excess £20,000)

Pension relief = £20,000

Example 5

A married couple, one spouse has salary or business profits of £100,000 and has investment income of £60,000 and the other spouse has salary or business profits of £40,000​£
​Spouse A pension contributions​50,000
​Spouse B pension contributions​50,000

​To calculate the pension relief restriction

​Spouse A total income160,000
​Excess (£160,000 - £150,000) = £10,000

Pension relief is the lower of:

  1. £50,000 (actual pension contributions)
  2. £40,000 (£50,000 less excess £10,000)
  3. £90,000 (relevant earnings £100,000 less excess £10,000)

Pension relief = £40,000

​Spouse B total income​40,000
​Excess = £0

Pension relief is the lower of:

  1. £50,000 (actual pension contributions)
  2. £50,000 (£50,000 less excess £0)
  3. £40,000 (relevant earnings £40,000 less excess £0)

Pension relief = £40,000

Example 6​

An individual has salary or business profits of £25,000 and has a company distribution of £145,000​£
​Pension contributions​20,000

​To calculate the pension relief restriction

​Total income​170,000
​Excess (£170,000 - £150,000) = £20,000

Pension relief is the lower of:

  1. £20,000 (actual pension contributions)
  2. £30,000 (£50,000 less excess £20,000)
  3. £5,000 (relevant earnings £25,000 less excess £20,000)

Pension relief = £5,000

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