Your client, Jessica, has requested advice in relation to the maximum contribution she can make to a personal pension scheme.

Jessica – other income:
– Prior to the tax year 2017/18 Jessica had no other source of income.
– Starting from the tax year 2017/18, Jessica receives rental income of £6,000 each tax year.

The Langley Partnership:
– Prior to 1 July 2018, there were two partners in the partnership – Issa and Finn.
– From 1 July 2018, the profit sharing ratio will be: Issa 20%, Finn 40%, and Jessica 40%.
– The budgeted tax-adjusted trading (loss)/profit of the partnership is:
– Year ending 31 March 2019 – (£160,000)
– Year ending 31 March 2020 – £205,000.

Jessica – personal pension plan contributions:
– Jessica joined a registered personal pension scheme on 1 May 2018.
– She has not previously been in any pension scheme.
– She wishes to make the maximum possible contributions which will qualify for tax relief in each of the tax years
2018/19 and 2019/20.

Required:
(c) Explain, with supporting calculations, the maximum amount of the contributions Jessica can pay into her pension scheme in each of the tax years 2018/19 and 2019/20 without incurring an annual allowance charge.
(5 marks)