Pensions A-day -
Spring 2006
By Graham Cleveland, Trinity Wealth
Management
A-Day
is nearly upon us and yet we still do not fully know all the
details, not because we haven't learnt them, but because the
Government has not fully published them! I just want to quickly
cover what can and should be done before 5th April 2006 (A-day).
What can be done, and
what are the benefits that can still be achieved?
- Invest
into a pension and then receive it all as cash at retirement!
- This is for directors or employees who have a long
service with a company but have not done a pension or have
a very small pension fund. This is possibly the best tax investment
available, do not miss this opportunity, check with us to
see if it fits your profile or any of your clients.
- Claim
corporation tax relief without reference to ICTA 1988 if company
year ends before 6 April 2006 - Under the new rules
it may not be possible to claim corporation tax for company
contributions in certain situations. By investing in a pension
now, this will guarantee tax relief.
- Boost
remuneration to improve cash or eliminate surplus
- If you have the ability to increase your salary then this
may be the option to boost your tax free cash from your pension
fund and then have it protected under the old rules.
- The
use of carry back and carry forward for Retirement Annuity
Contracts (Section 226 RAC's) - This gives you
the ability to go back 7 years and use up your pension allowances
and receive tax relief.
- The
use of basis year for funding purposes and the use of carry
back up to 31st January 2007 - This allows premiums
to be paid and to claim back full tax relief at the clients
marginal rate.
- Pay
special contributions based on past service - The
ability to put a special contribution into a pension scheme
based on past service and receive full tax relief.
- Add
scheme member to existing Executive Pension Plan
- This will then allow the contract to be transferred after
A-day without winding up the scheme and then possibly losing
protection on the tax free cash.
If any clients are concerned about any of the above
issues, then please contact us ASAP as time is not on our side.
I fear, however, that trying to transfer your benefits now from
one scheme to another before A-day is very unlikely due to the
time constraints.
If you require any advice on the new simplification
rules in future, then please feel free to contact us.
Graham Cleveland,
Trinity Wealth Management
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