Ex colleague of mine has been forced to work for himself whereby he has had to start his own limited company and pay himself through PAYE and dividends. He has substantial pension savings which are at or near the LTA. He wants to pay money into a pension and I believe he can't pay employer contributions into a SIPP and needs anther type of pension vehicle to enable his and his employer (his own company) to contribute.
Any advice as to a reputable financial company to deal with this sort of thing?
Thanks
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Executive Pension
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- Lemon Slice
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Re: Executive Pension
It is acceptable to pay a Director's pension into a private SIPP from a Ltd Co. with the money not being subject to Corp.tax.
However, if he is near his LTA then there is nothing really to be gained.
However, if he is near his LTA then there is nothing really to be gained.
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- Lemon Slice
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Re: Executive Pension
baldchap wrote:It is acceptable to pay a Director's pension into a private SIPP from a Ltd Co. with the money not being subject to Corp.tax.
However, if he is near his LTA then there is nothing really to be gained.
Thank you for this reply, very helpful.
So, he can get a pension contribution directly from the company of which he is a director and make a personal contribution from his paye pay? Much the same as an ordinary employee where he pay 6% and the company tops up another 3%, for example.
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- Lemon Slice
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Re: Executive Pension
airbus330 wrote:baldchap wrote:It is acceptable to pay a Director's pension into a private SIPP from a Ltd Co. with the money not being subject to Corp.tax.
However, if he is near his LTA then there is nothing really to be gained.
Thank you for this reply, very helpful.
So, he can get a pension contribution directly from the company of which he is a director and make a personal contribution from his paye pay? Much the same as an ordinary employee where he pay 6% and the company tops up another 3%, for example.
Not quite. They are not linked.
If he is employed by his Limited Company, his accountant should have it set up efficiently, so that he is paying no or little PAYE.
However, he will pay tax on his dividends.
As long as the tax is paid he can invest that wherever he wants. SIPP, ISA etc.
The Directors pension can pay upto £40k p.a. into a private SIPP. Again his accountant can advise.
In a nutshell, he should speak to his accountant, but shouldn't need a specialist.
Although, as I said before I don't see the point if nearing his LTA.
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- Lemon Quarter
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Re: Executive Pension
Is he married? What is his wife's pension position?
He could think of a) employing his wife in his company, and b) use the company to pay into her pension
He could think of a) employing his wife in his company, and b) use the company to pay into her pension
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- Lemon Slice
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Re: Executive Pension
Thanks for the comments, chatted with him last night and agreed that his accountant should really be doing this for him.
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