I am a member of my company's GPP scheme.
My salary is 39,000 PA, age 37, so I pay some Higher Rate Income Tax (40%)
I want to make the exact contribution to this Personal Pension that attacts Tax Relief at 40%, when it falls to 22%, I'd rather ISA that money than tie it up in a Pension.
Googling shows me that the 2005/2006 PA is 4895
Remembering my FPC1/2/3, I reckon that I pay the following amount of Income Tax
4895 @ 0% = 0
2090 @ 10% = 209
30310 @ 22% = 6668.20
1705 @ 40% = 682
So, the slice of my salary that attracts 40% Tax is £1705.
I do an annual Tax return, so can someone finish off the maths and tell me the exact amount I should put into my Pension every month to maximize tax relief.
Thanks.