Tapered AA idea
Wanted to run something by the forum and see if it makes sense,.
If we have a member who is in excess of £120,000 earnings and has lost their PA (has some tapering too, but that is separate issue)
Would making a pension contribution in excess of the AA, still save them tax if they regain their personal allowance?
My understanding is you only pay AA excess back at your marginal rate, which is 40%, whereas getting their income to below £100,000 would save them 60%ish on the earnings between 100k-120k
So they could regain their personal allowance, and only pay 40% tax on the excess of the AA... am i missing something or does that make sense?
of course this is provided the member is happy to do the above