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Information and public services for the Island of Jersey

L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Pension contributions and tax relief

​​​​​​​Paying into a pension scheme

There is no limit to the amount you can pay into your pension fund but you must have 'earned income' to get a tax deduction.

An example of 'earned income' would be a salary or self-employment income.

Pension​ contributions and tax relief

The maximum tax relief is the lower of:

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

Jersey pension scheme tax guide: glossary of terms​

Use our tax calculator to see how this works to reduce you tax.

Reduction in pension tax relief for higher incomes 

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 earns a total of £180,000 and also has the following​£
​Subscriptions​500
​Interest payments for their home (as restricted by Article 90AA)
3,000
​Employment pension contributions
​14,000
​Private pension contributions​30,000

​To calculate the pension relief restriction

​
​Total income​180,000
​less subscriptions
​(500)
​​179,500
​Excess (£179,500 - £150,000) = £29,500
​

Pension relief is the lower of:

  1. £44,000 (actual pension contributions)
  2. £20,500 (£50,000 less excess £29,500)
  3. £150,000 (relevant earnings £179,500 less excess £29,500)

Pension relief = £20,500

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​
​Spouse A 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
​
​Spouse B 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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