Chartered Accountants of Poynton, Cheshire

Pension Payments

There have been considerable changes to the pension contribution rules over the last couple of years.

In summary, these are as follows:

• Any individual can make payments of £3600 per annum gross of tax, whether they have an income or not.

• If an employer makes a contribution on behalf of an employee, this will be tax deductible in that employer's accounts as long as the payment is made 'wholly and exclusively1 for the purposes of the trade.

• The maximum any individual can pay in any pension payment period (which is usually the same as the tax year) is normally £21,5000 and any contributions over this will be subject to income tax of 40%. There are some exceptions to this rule.

• There is no longer a provision which allows excessive personal pension contributions to be carried back to the prior year. Some special rules remain in place for retirement annuity contributions.

Edward Appleton: "You can make huge tax savings which can transform your life, when you know how."

Ralph Ellerton: "Appletons live and breathe the paperwork so you don't have to!"

Tax Returns
If you submit your tax details to us, we can advise you of your exact tax liability.

Personal Accounting

The Basic Principles

Each member of your family is taxed as an individual, with personal allowances and exemptions.

With the right circumstances and careful planning, a couple with two children could have income and gains of at least £53,580 tax free, and up to £183,180 before paying any higher rate tax.

The Fundamental Rules are:

• Make the most of tax-free opportunities
• Keep marginal tax rates as low as possible
• Maintain a spread between income and capital

Five Personal Planning Pointers

1. Moving Capital
   Planning is often hindered by the potential for tax charges when assets are moved between family members.
   Appletons can advise you how to reduce your overall marginal tax rates by transferring assets between spouses and children in a tax-efficient manner.
2. Generation Skipping
   Consider tax-efficient gifts from grandparents. Income from capital gifted by grandparents or more remote relatives will be taxed as the child's. Regular savings through deposit accounts can also help.
3. Marriage Breakdown
   There are cases for and against making transfers as quickly as possible after separation. Check with us for the best plan of action.
4. Your remuneration package
   There are ways to improve your net pay, other than asking for a rise. Are you making the most of current benefits regarding pensions, company cars and expenses, and other benefits such as medical cover, or use of a computer at home?
5. A 'Living Will'
   As well as ensuring that you have adequate insurance cover, with life assurance perhaps written into trust for your spouse or children, you also need to make a Will.
   You will need to keep it under regular review, to ensure it reflects changes in your family and financial circumstances.
   We recommend that you and your spouse also execute an enduring power of attorney and a 'Living Will'

---

 

Click below for more on:

Your retirement strategy – while it’s never too late to plan for your retirement, the earlier you start, the more chance you will have to accumulate the funds you will need.

Savings and investments – good planning can help you to minimise the tax you have to pay on your savings, and maximise the returns.

Your estate – inheritance tax is a real concern for more and more people. Implement strategies now to minimise your liability.

home | resources | vacancies