Taxation of pension payments
21 January 2008, 03:42 PM
#1
Scooby Regular
Thread Starter
Join Date: Jun 2001
Posts: 8,021
Likes: 0
Received 0 Likes
on
0 Posts
Taxation of pension payments
Hi all, I'm after some expertise in personal pension payments and taxation/rebate on them from a limited coy and personal stance. Anyone in the know?
21 January 2008, 04:39 PM
#6
Scooby Regular
Join Date: Feb 2004
Location: High Wycombe
Posts: 3,763
Likes: 0
Received 0 Likes
on
0 Posts
You might be a little bit late - speak to a business / tax accountant about setting up an EBT (Employees benefit trust).
The way of my understanding is that the "EBT" can effectively loan you money which effectively you don't have to pay back, and only have to pay a pittance of a percentage on.
/edit
Misread the post slightly.
The way we do our pensions is that we effectively set up another company to run the "pension" The Pension company owns our premises and charges us "rent" which "the pension company" then invests.
The "pension company" is very tightly controlled (via a third party) and we do not have access to the capital.
The way of my understanding is that the "EBT" can effectively loan you money which effectively you don't have to pay back, and only have to pay a pittance of a percentage on.
/edit
Misread the post slightly.
The way we do our pensions is that we effectively set up another company to run the "pension" The Pension company owns our premises and charges us "rent" which "the pension company" then invests.
The "pension company" is very tightly controlled (via a third party) and we do not have access to the capital.
Last edited by BlkKnight; 21 January 2008 at 04:49 PM.
Trending Topics
21 January 2008, 05:16 PM
#9
Scooby Regular
Thread Starter
Join Date: Jun 2001
Posts: 8,021
Likes: 0
Received 0 Likes
on
0 Posts
I see.
What I was getting at is as follows, assuming a stakeholder pension, paying out pre profit which is not taxed and allowable, against paying corporation tax at 20%, then claiming the 40% personal back.
Assuming the individual receives dividends which are deemed to be taxed at 40% because of the basic rate "stamp", am i right in saying the assumed basic rate relief would equal the corporation tax paid by the company thus no net difference. In future years with corp tax going up there would be a small advantage in paying direct from the company.
This is on the basis that two directors split net profit but wish to pay different amounts into a pension scheme.
Or am i barking?
What I was getting at is as follows, assuming a stakeholder pension, paying out pre profit which is not taxed and allowable, against paying corporation tax at 20%, then claiming the 40% personal back.
Assuming the individual receives dividends which are deemed to be taxed at 40% because of the basic rate "stamp", am i right in saying the assumed basic rate relief would equal the corporation tax paid by the company thus no net difference. In future years with corp tax going up there would be a small advantage in paying direct from the company.
This is on the basis that two directors split net profit but wish to pay different amounts into a pension scheme.
Or am i barking?
21 January 2008, 05:28 PM
#10
Scooby Regular
Join Date: Feb 2004
Location: High Wycombe
Posts: 3,763
Likes: 0
Received 0 Likes
on
0 Posts
Because "company" is paying the "Pension Company" "rent" there is no corp tax to be paid.
You are allowed to pay a certain value into the "Pension Company" without incurring any penalties.
You do however pay tax when you withdraw your pension (no work around for this yet).
This scheme has to be set up by a government body (via your accountant)
You are allowed to pay a certain value into the "Pension Company" without incurring any penalties.
You do however pay tax when you withdraw your pension (no work around for this yet).
This scheme has to be set up by a government body (via your accountant)
Thread
Thread Starter
Forum
Replies
Last Post
blockhead
Subaru Parts
19
07 November 2015 11:50 PM
Coupe Rob
Non Car Related Items For sale
5
28 September 2015 11:14 AM
andy97
Computer & Technology Related
12
16 September 2015 08:07 PM