Recent news on pensions
Following the Autumn Statement
and in advance of the new tax year, we have hand picked a few things relating to pension planning that may affect you as a commercial business owner and UK taxpayer.
This is just a brief sum up. To discuss your own personal circumstances contact Figurit who can provide bespoke advice with effective tax planning.
From April 2015, pension savers with a Defined Contribution Scheme such as a SIPP will have increased flexibility in when they draw pension funds after age 55. The first 25% can be drawn free of tax however tax applies after at the respective income tax rate, 20%, 40% or 45% depending on your situation.
No more “Death Tax”
From April 2015, the 55% tax on pension funds upon death is to be abolished for pension holders under 75. This applies to both the transfer from the “estate” and when the beneficiary withdraws the funds. For pension holders over 75, the transfer is tax-free but the withdrawals are subject to the relevant income tax rate of the beneficiary.
These were both announced in the 2014 Pensions Bill.
The following were additions from the Autumn Statement.
Should one of the pension holders within a joint life or guaranteed annuity pension die before aged 75 the beneficiary will receive the pension annuities tax-free, from 6 April 2015.
Tax relief on pension contributions to age 75
It was suspected for the age in which tax relief can be claimed on pension contributions to change. The Autumn Statement announced it is to remain at 75 for now.
A small 2.5% increase will be applied to the State Pension from the new tax year.
Figurit consider pension planning to be a robust, tax effective way to save for your retirement. Contact us to discuss your retirement plan and we will help you work out a bespoke way forward.
020 7276 9333