The tax benefits of making pension contributions can be significantand athough there have not been any major changes in ths area inrecent years (despite speculation that the Govemment would doso)is always useful to recap the main tax benefitsAs a reminder, Personal Pension Contributions made by indviduals arepaid nor of basic eateincome tax (20%)since HM Revenue & Customs(HMRC) pay the 20% tax into the pension scheme For oompio, ifyou pay S8,000 in to your pension scheme during the yoar, HVRC wadd $2.000 to that, glving a total Caross) contribution to your pensionFor basic rate taxpayers therefore (hose with total income of up income by other moans og.byto 945.000 for 2017/18), there is no additional tax saving by making way of dividends. By doing thispension contributions, since tax relef is given al source.orneremHigher rate tapoyers however con claim an extro 20% of the gosscombution from HMRC· Using the example above, a higher ratetaxpayer can claim an additional $2.000 from HMRC on the 58000n this situation, considerationrelief can becontribution paid For additional rate txpayers (hose with taxable con beincome obove $150,000 for the yeo), the extra relief would be £2.500Higher and additional rate toxpayers con therefore benefit frompotentialy significant tax savings by making pension contributions. fis efficient since such contributions will usualy quality for Corporation laxwise at this tirne of year to consider the benefits of maling odditionalpension contributions betore 5 April lo to tal within the 2017/18 taxyoar. This is porticularly selevant for those individuols who might be indanger of falling foul of the High Income Child Benett Charge (incomecontribution to a pension scheme for the directons) This is also taxrellot, currently at 10%. The annual alowance of S40000 as mentionedabove apples to contibutions made by Indivduals and employers, sothis would st nood to be considered when thinking about the level ofcontribution to mokeAt Pearson May we specialise 00)oo margna incomo tux tote o osfin a full range of accountancyservices to help you maximise e a liit to e amountot pension.cotbuion can makezyour profits and minimise theincome above £100000 (due to the gradual loss of the personal taxchemes are exempt from income tox and capital gains aThere is no financial limit on the omount that may be contributed to  will also be appreciated from the above that one or the manregistered pension scheme but there is o limit on the amount on which benefits for higher and odditional rate tapayers in maing pensionan individual can clairn tax relief. This imit is the greater oftax you have to paycontributions is to receve tax relief during their working lwes which isat a higher rate (hopefuly) than the pension income wil be subjec(a) the individual's UK relovant earnings for the sax yoar (beoadly, thelovel of their salary and/or sedl-employment/partnershlp incomex andWith the new fleoble pension ruloes it can olso be much easier totransfor pension pots on doath to other family members withoutFurthermore, there is an ovemiding annual alowance of 5400000. triggerng significant tax charges in doing so. Pension funds can olsomeaning thet any contibutions which exceed E40000 (gross) in the be free of Inhertance Tax (IHT) if they are suitably writen in trust, so thattax year will suffer a tax charge on the excess This annual allowance is they remain outside one's estate on death Pensions should thereforereduced tor high earners, by $1 for every $2 that an individual's income form an important part of any IHT and estate planningexceeds S150000 (subject to a minimum allowance of $10.000)01225 46049101225 764441Specific advice in relation to pension schemes should be obtainedAlthough beyond the scope of this article, there is also a "ifetime from your pension adviser or an independent financial adviser. Theallowance (cumently SIm) which Imits the amount of pension bene obove is for generol guidance only and no action should be tokenAWwwww.pearsonmay.co.ukthat can be drawn without triggering a tax charge, restrictions on the without oblaining speciic ocviceevel of pension contributions that can be made when an indvidualOAs ateady in drawdown on a pension, and 'carry forwand provisionsPearson May Chartered Accountants and Chartered Tax Advisersavallable whereby an individual who has been a member of apension scheme for the relevant years in question can contribute more

Date: 11 January 2018

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The tax benefits of making pension contributions can be significant and athough there have not been any major changes in ths area in recent years (despite speculation that the Govemment would doso) is always useful to recap the main tax benefits As a reminder, Personal Pension Contributions made by indviduals are paid nor of basic eateincome tax (20%)since HM Revenue & Customs (HMRC) pay the 20% tax into the pension scheme For oompio, if you pay S8,000 in to your pension scheme during the yoar, HVRC w add $2.000 to that, glving a total Caross) contribution to your pension For basic rate taxpayers therefore (hose with total income of up income by other moans og.by to 945.000 for 2017/18), there is no additional tax saving by making way of dividends. By doing this pension contributions, since tax relef is given al source. ornerem Higher rate tapoyers however con claim an extro 20% of the goss combution from HMRC· Using the example above, a higher rate taxpayer can claim an additional $2.000 from HMRC on the 58000n this situation, consideration relief can be contribution paid For additional rate txpayers (hose with taxable con be income obove $150,000 for the yeo), the extra relief would be £2.500 Higher and additional rate toxpayers con therefore benefit from potentialy significant tax savings by making pension contributions. fis efficient since such contributions will usualy quality for Corporation lax wise at this tirne of year to consider the benefits of maling odditional pension contributions betore 5 April lo to tal within the 2017/18 tax yoar. This is porticularly selevant for those individuols who might be in danger of falling foul of the High Income Child Benett Charge (income contribution to a pension scheme for the directons) This is also tax rellot, currently at 10%. The annual alowance of S40000 as mentioned above apples to contibutions made by Indivduals and employers, so this would st nood to be considered when thinking about the level of contribution to moke At Pearson May we specialise 00)oo margna incomo tux tote o osf in a full range of accountancy services to help you maximise e a liit to e amountot pension.cotbuion can makez your profits and minimise the income above £100000 (due to the gradual loss of the personal tax chemes are exempt from income tox and capital gains a There is no financial limit on the omount that may be contributed to will also be appreciated from the above that one or the man registered pension scheme but there is o limit on the amount on which benefits for higher and odditional rate tapayers in maing pension an individual can clairn tax relief. This imit is the greater of tax you have to pay contributions is to receve tax relief during their working lwes which is at a higher rate (hopefuly) than the pension income wil be subjec (a) the individual's UK relovant earnings for the sax yoar (beoadly, the lovel of their salary and/or sedl-employment/partnershlp incomex and With the new fleoble pension ruloes it can olso be much easier to transfor pension pots on doath to other family members without Furthermore, there is an ovemiding annual alowance of 5400000. triggerng significant tax charges in doing so. Pension funds can olso meaning thet any contibutions which exceed E40000 (gross) in the be free of Inhertance Tax (IHT) if they are suitably writen in trust, so that tax year will suffer a tax charge on the excess This annual allowance is they remain outside one's estate on death Pensions should therefore reduced tor high earners, by $1 for every $2 that an individual's income form an important part of any IHT and estate planning exceeds S150000 (subject to a minimum allowance of $10.000) 01225 460491 01225 764441 Specific advice in relation to pension schemes should be obtained Although beyond the scope of this article, there is also a "ifetime from your pension adviser or an independent financial adviser. The allowance (cumently SIm) which Imits the amount of pension bene obove is for generol guidance only and no action should be token AWw www.pearsonmay.co.uk that can be drawn without triggering a tax charge, restrictions on the without oblaining speciic ocvice evel of pension contributions that can be made when an indvidual OAs ateady in drawdown on a pension, and 'carry forwand provisions Pearson May Chartered Accountants and Chartered Tax Advisers avallable whereby an individual who has been a member of a pension scheme for the relevant years in question can contribute more

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