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If I have 10k of rental income and 10k of earnings from employment? What is the maximum amount I can pay into a SIPP?

I assume this would be 8000 and (plus SIPP automatically reclaim 20% income tax, hence adding 25% to the amount contributed) so paid 100% of earnings into pension.

However if you look at the personal allowance, the total amount of income tax paid is less than £2000. (£1700 ish in fact). Is this okay?

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  • Minor point on wording - you are not claiming 25% tax. You are effectively paying in £10,000 of which £2,000 is paid by the government, this is a tax rate of 20% of £10,000 not 25% of £8,000. There is no 25% income tax rate in the UK at the moment.
    – Steve Kidd
    Commented Apr 17 at 13:52
  • Yes I know. will update to reflect this.
    – Lost1
    Commented Apr 18 at 10:13

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