The introduction of new pension freedoms in 2015 and economic conditions that have propelled transfer values higher over the last few years have combined to encourage more of us to consider the transfer of our often fated ‘gold plated’ Final Salary Pension Schemes.
Whilst most of us are aware of the need to save monies on a regular basis for when we retire, for those who have their own businesses and who utilise commercial property, pensions can be a very sophisticated and useful vehicle.
There are many IHT reliefs available and while individually the exemptions are not huge, if they are used extensively during your lifetime they can result in significant tax savings; here are five you may wish to consider:
The childcare voucher scheme was set to be closed to new entrants from April 2018. However, following a debate in the House of Commons last week Education Secretary Damian Hinds announced that the deadline has been extended by six months, to October 2018. This announcement came as welcome news to many, particularly the 119,000 signatories that petitioned for the scheme to remain open alongside the newly introduced Tax Free Childcare (TFC). Damian Hinds confirmed that the closure of the scheme has been postponed in order for the government ‘to reflect concerns and to allow the bed-in’.
Every individual has a pension allowance which will allow them (or a third party) to contribute up to £40,000 in a tax year (subject to roll forward provisions). When you make a personal pension contribution it will extend the amount of income that is taxed at the basic rate. If you haven’t used your allowance you may wish to think about making a pension contribution before 5 April 2018. This is especially pertinent as more landlords will become higher rate tax payers due to the mortgage interest relief changes. It is worth noting that where your income is mainly from rental properties then you may be restricted to paying £3,600 (gross).