How You Can Contribute £500,000 to a SSAS and still get Tax Relief!
In 2020 there are not many structures better than a pension when it comes to tax reliefs and allowances. However as many of you will already know – your IFA will normally tell you that the maximum contribution into a pension stands at £40,000. But what if you have a profitable company with £2m of profits and you wanted to make a contribution to a pension that was somewhat larger (A LOT LARGER!!) – is there anything that can be done?
The answer is YES! If you want to contribute £100,000…. £200,000 or even £500,000 – and get corporation tax relief – there is a way.
If a company establishes a Small Self Administered Pension Scheme (SSAS) – the fund is not ‘earmarked’ in the same way as other pensions. What this means is that a contribution made to a SSAS will remain unallocated to any specific individual person. The fund is a general fund for all the Members. It is only when money is paid OUT that the funds become allocated to anyone specific. As the funds are deemed to be ‘general’ – there are specific rules from HMRC as to how tax relief is given.
A contribution of up to £500,000 can be made and tax relief granted in the year of contribution, as long as the contribution is not earmarked for anyone specific. For contributions higher than this, HMRC will spread the relief over a period of years.
What this means for a business owner is that YES they CAN make tax relieved contributions to a SSAS that are bigger than the £40,000 ‘normal’ pensions limit.
As with all things related to SSAS and Pensions – it is best to speak to an expert to see if what you are trying to do is indeed possible.
Many business owners are unaware of the rules or how they can use their pensions – which is where we can help.
Paul Stewart (Our MD) is a Pensions Administrator (an official HMRC recognised role). He was also an Examiner for the Chartered Insurance Institute dealing with the exams IFA’s had to pass in order to give advice on …PENSIONS! So if there is anyone who can help guide you, then he can!
Most Advisors, such as IFA’s and Accountants do not have the internal experts to assess a client’s FULL situation – and come up with the best overall strategy.
As I have worked in the pensions and tax planning field for over 30 years, I have personal access to experts in all taxes and can combine these experts into a unique service that really does go beyond what you’d get from your normal ‘Advisors’.
Every wealthy entrepreneur or property investor I have ever met had their own Accountant, Solicitor and Financial Advisor – yet in 90% of cases we were able to dramatically able to improve their overall exposure to UK taxes and access to their pension money.
What is vital is the proper implementation – with care at every stage.
This is why we offer a FREE consultation – as it lets us explore your current situation before jumping in with ‘solutions’.
If you are interested in seeing if your pension can be used to help support your business – then call us now, or send us your details and we will call you back.
We look forward to helping you soon.