Specialist Property Tax Planning Services for Landlords and Property Investors 
pension, tax management, pension contributions
We often discuss with our clients how pensions can play a part in not only their future, but the immediate impact they can have on your tax position – whether you are an individual or a business owner. 
We’ve put together below 5 ways that pensions can play a part in your tax planning. 
When considering your pensions, do talk to a financial advisor you know and trust – as tax is just one of the benefits. 
So how can pensions help you manage your tax? 
1) If you run a limited company, directors can make employer contributions from their business, benefiting from tax relief against corporation tax – so potentially up to 25% relief given with the new rates that came into effect from 1st April . 
2) a personal contribution can assist in extending your basic rate band of tax, so as well as getting your pension topped up by 20%, it also has the effect for higher rate taxpayers of bringing more of their income into the 20% bracket as opposed to 40%/45%. 
3) much like point number two this is also important for people who are in receipt of child benefit. Once someone in the household is earning over £50k, your entitlement to receive child benefit can be restricted, up to the point where someone exceeds £60k your entitlement is removed completely. These thresholds though are based on “net adjusted income” and pensions can help to reduce these figures, meaning that households may be able to retain some or all of their child benefit entitlement. 
4) a common benefit we also see missed is managing the loss of personal allowance. Pensions effected your net adjusted income, and this is what the personal allowance entitlement is based on rather than your taxable income – so if you are earning over £100k and at risk of losing your personal allowance then personal pension contributions can retain this for you. This also interacts with the tax free child care entitlement – so important if you have children in nursery/preschool 
5) certain pensions can be used to hold commercial property – so retaining an asset that you may use for your business, paying into your pension so you get the benefit, and getting tax relief on the rent you pay from your business – WIN, WIN, WIN 
If you don’t have a financial advisor you know and trust, then reach out and we would be happy to make an introduction to someone who can help. 
We hope you found this useful. 
If there are any other topics you want covered off, please feel free to contact us. 
#pensions #taxmanagment #taxallowances #penisoncontributions 
Share this post:

Leave a comment: 

Our site uses cookies. For more information, see our cookie policy. Accept cookies and close
Reject cookies Manage settings