I was recently talking to a new business owner, he had worked for the government for a number of years and  was one of the unlucky people made redundant following the government cuts. He had setup his new business but wanted to expand it, but how?

He  found that the friendly bank manager of old  is no longer quite so friendly and accommodating?

I advised him not to take it personally; as banks cut back on lending, there is a void and we are finding lots of sound businesses struggling to obtain finance in the current conditions.

There are other ways to get the funding you need though. If you have a pension of any sort you can use your pension scheme to fill the void left by the banks and provide funding to your company.

The Traditional Way

We have discussed before using a Small Self Administered Scheme (SSAS) to provide a loan to the sponsoring employer.

This can be a good option in some circumstances, but the rules can be restrictive. For example:

• You can only make a loan of 50% of the fund;
• The loan must be secured as first charge on an asset of at least equal value;
• The maximum period for the loan is 5 years (although the loan can be rolled over once).

The Alternative Way

If the SSAS loan route does not provide the flexibility for your business, there are other solutions available to you and your business. The benefits of these are:

• Provide funding to your business by investing up to 100% of the pension scheme value;
• No security needed as the funding is an investment not a loan;
• No maximum period for the investment;
• Overall greater flexibility afforded, but still within pension regulations.

Why not consider giving your bank manager the boot and taking control of your pension and business funding?

Are you in this situation? If you are, we might be able to help you.  For a free no-obligation consultation call me today on 0844 848 2277.

 Arthur

Three years passed before the Government decided to muddy the waters.

In the April 2009 budget the Chancellor announced that from April 2011, tax relief on pension contributions would be tapered down for those with incomes over £150,000, reducing to the basic rate level of 20% for people on incomes over £180,000. Anti-forestalling measures were put into place immediately, designed to prevent people making large additional pension contributions prior to the April 2011 changes.

That was then, this is now.

The new coalition Government has proposed an alternative approach to take effect from April 2011. On the face of it is looks a simpler option, whereby the annual allowance (currently £255,000) is reduced for all, to a suggested range of between £30,000 and £45,000. Any contributions up to this level would receive full tax relief applicable to the individual, with any excess subject to the annual allowance charge.

As with all changes, there are winners and losers.

Members of final-salary pension schemes would appear to fit in the latter category. This could result in an employee receiving a pay rise, which would not have triggered a tax charge under current rules, having to pay extra tax through their tax returns.

Of course, 8 months is a long time in politics, especially for a relatively new coalition government, so watch this space.

Don’t leave it to chance, call for more information on 0844 848 2277.

What if you could use your pension scheme to lend money to your business for that new project or just to ease cash flow?

Well you can and our clients and their businesses have benefited!

That is the power of a Small Self Administered Scheme (SSAS)

A SSAS is a corporate pension scheme that allows a loan to the sponsoring employer of up to 50% of the schemes assets.

Let me give you an example…

You have existing personal and occupational pensions with a combined value of £100,000.

By transferring the existing pensions to a SSAS, you are now able to loan up to £50,000 to your company, the sponsoring employer.

Not only does your business have the funds it requires, the pension scheme receives the interest payments rather than the bank!

A SSAS can have up to 11 members and it’s the combined assets that count when calculating the loan of up to 50% so in the right circumstances the loan can be substantial!

There are restrictions and this may not be suitable for everyone, but can your business afford not to find out more?

Call today for your free consultation on 0844 848 2277.

If you are making pension contributions from your net salary, even after the tax relief you receive you have not made up the deductions in your wages. The key is National Insurance Contributions (NIC)!

Let me give you an example…

You are a higher rate taxpayer and you are making net monthly contributions to your pension of £500.

With basic rate tax relief the gross contribution to your pension is £625. Add to that the higher rate tax relief of £125 that can then be claimed through an extension of your tax code or through self assessment, and you receive total tax relief of £250.

Sounds a good deal right?

Wrong! The gross salary you have used to pay that £500 contribution totals £847.46 when you take account of income tax and NIC at your marginal rate.

Salary Sacrifice could add over 25% extra to your pension!

Now consider that your employer makes a contribution to your pension of £847.46 which puts you in front straightaway.

The employer can offset the pension contribution against corporation tax AND also saves employers NIC of 12.8%. Persuade your employer to add the NIC savings to your pension contribution and this will result in a total contribution to your pension of £955.93.

That’s a surplus of £205.93 going into your pension each month, 27% higher than the personal contribution from your net wage!

If you want to make your pension contributions work harder for you, call for your free consultation on 0844 848 2277.

FURBS used to offer a great way for employers to provide extra compensation to high paid employees whilst receiving corporation tax relief.

For you the employee, you were able to build up pension provision beyond the set limits, albeit with a watered-down tax benefit compared to approved pensions.

And the best bit, at retirement you could take the whole pension as a lump sum tax FREE!

A-Day and Pension Simplification changed all that!

Now you pay tax on the growth of the fund at the highest rate:

• 40% (rising to 50% from April 2010) tax on savings income;
• 32.5% (rising to 42.5%) on UK dividend income;
• 18% tax on capital gains.
• And even pay income tax when you take the benefits at retirement.

But there is a solution

You can transfer to an International FURBS and pay NO tax on the growth of the fund.

How would you like to take the pension value as a lump sum at retirement totally free of tax?

With an International FURBS you can. Not only will the proceeds pass to your dependants tax-free on your death, it can even reduce your estates IHT bill!

If you think this may be of benefit to you, call for your free consultation on 0844 848 2277.

We were approached by a company, who’s six directors had invested into a scheme which left them with that feeling.

On paper it looked like a great scheme, where-by the companies premises were incorporated into the pension pot. The company then paid rent into the pension scheme, helping it grow whilst reducing the companies tax bill.

Great idea.

Except this didn’t account for the retirement plans of the directors.

Their ages varied greatly. So what was going to happen when one was ready to retire?

Before this became a problem we arranged to transfer the assets from the company scheme into individual SIPP (Self Invested Personal Pension) arrangements.

Moving to individual SIPP’s offers the following benefits:

1) You have control of your pension

Unlike in the company scheme, you now have control of the invested assets. The decisions of how and when to take your benefits are down to you. This is of particular benefit if you are forced to retire early due to ill health.

2) You can diversify your investments

Reduce the reliance of one asset class (in this case, commercial property). You can then explore alternative investment strategies that are not correlated to traditional investment.

3) Your pension becomes fully portable

When your pension is in an individual scheme it can be transferred, should you change employment.

Our clients are so pleased with the new scheme, one of them stated (name withheld for privacy reasons):

“We were happy with our original scheme, but as time went on the realisation of what was ahead dawned on us. Ralph met with us all and within a short amount of time had arranged a scheme that solved everything. We couldn’t be happier.”

The message here is clear. It’s always worth checking how your retirement plans are going to give you the best return.

We can help you. Call on 0844 848 227 and we can start on your Life Plan today.