By Louise Misiewicz
Do you contribute towards a pension?
Are you an additional rate tax payer?
As we wrote in our previous article here recently that pension contributions now receive a tax credit.
So, if you are a high rate tax payer and contribute £20,000 into a pension then you’d receive £4,000 tax back from HMRC. Most people contribute towards a pension via their employment, and our tax specialists can advise further on the best ways to minimise tax liability.
Our team of property tax experts are on hand to best advise our clients on how to invest their money whilst minimising their tax liability – simply get in touch here to discuss your needs with us further.
Clearly, pensions are a very tax-efficient investment. It is also important to remember that any gains or income generated within the pension is also tax-free.
Pension contributions limited to £10,000
Whilst the above was a very nice way to invest and get tax relief, the government have decided to stop people benefitting from the tax relief by investing in their future, as can be seen from their website.
The amount of money that you can invest into a pension now drops from £40,000 for every £2 you earn over £150,000. If you earn £160,000, then this is £10,000 over the £150,000 rate.
This means that the pension contribution allowance is reduced by £5,000.
This person could now contribute £35,000 into their pension and get tax relief on it.
If you earn more than £210,000, then the maximum amount of money that you can invest into a pension is limited to £10,000. Our specialist tax advisers can assist you further in discussing your wealth planning.
How to engage with us
If you want to understand how to implement this strategy or to discuss other finance/tax questions then please book some time with us using the below calendar.
Please use the redeem code “Article 33” to get 33% off your next consultation call.
If you are looking for a new tax specialist accountant, then please book some time with us using the below calendar.
Please note that this booking is to describe our services and will not be used to discuss your personal tax affairs.