Can my business really take a loan from my pension?
Is your business in need of a cash injection, but your bank will not provide a loan or are charging too much?
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.
How to get over 25% more pension from your existing wage
Are you getting the most out of your pension contributions? If you are not using SALARY SACRIFICE the answer is most likely to be no!
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.
What are the alternatives to your FURBS?
Have you got a Funded Unapproved Retirement Benefits Scheme (FURBS) or are you an employer who offered one to your key staff in the past?
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.
Are you planning on selling your business?
The taxes levied at businesses when they are sold are colossal.
But there are ways you can greatly reduce this bill.
An entrepreneur, planning the future sale of his successful business, was referred to us by an existing client. He already had the skill set to make the business grow and planned to float the business in 3 years time.
Your money, not the taxman’s
He wanted to ensure that he and his family were the prime beneficiaries of his years of hard work and NOT the taxman!
We calculated that on the assumed sale price of £10m the Capital Gains Tax liability would be £1.64m (more if the client or his partner had already utilised their Entrepreneurs Relief).
This would leave net proceeds of £8.36m but this forms part of his estate in the UK for IHT purposes. At current rates this is levied at 40%, creating an IHT liability of £3.34m.
On his death, the beneficiaries to his estate receive just £5m from the £10m sale!
Share Release Trust
That is where we stepped in, setting up a Share Release Trust.
The shares are moved into a tax free trust-based environment and the client benefits from the following:
- Shares can be sold free of Capital Gains Tax
- Re-investment can be made tax free
- Income returns are tax free
- The proceeds of the business sale pass to beneficiaries free of IHT
And here’s the best bit, based on the current valuation of the business of £1m the cost to the client now is £150,000 and no future tax liability. Saving the client literally millions!
Are you feeling trapped by your company pension?
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.
Can my business really take a loan from my pension?
Is your business in need of a cash injection, but your bank will not provide a loan or are charging too much?
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.
How to get over 25% more pension from your existing wage
Are you getting the most out of your pension contributions? If you are not using SALARY SACRIFICE the answer is most likely to be no!
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.
What are the alternatives to your FURBS?
Have you got a Funded Unapproved Retirement Benefits Scheme (FURBS) or are you an employer who offered one to your key staff in the past?
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.
Are you planning on selling your business?
The taxes levied at businesses when they are sold are colossal.
But there are ways you can greatly reduce this bill.
An entrepreneur, planning the future sale of his successful business, was referred to us by an existing client. He already had the skill set to make the business grow and planned to float the business in 3 years time.
Your money, not the taxman’s
He wanted to ensure that he and his family were the prime beneficiaries of his years of hard work and NOT the taxman!
We calculated that on the assumed sale price of £10m the Capital Gains Tax liability would be £1.64m (more if the client or his partner had already utilised their Entrepreneurs Relief).
This would leave net proceeds of £8.36m but this forms part of his estate in the UK for IHT purposes. At current rates this is levied at 40%, creating an IHT liability of £3.34m.
On his death, the beneficiaries to his estate receive just £5m from the £10m sale!
Share Release Trust
That is where we stepped in, setting up a Share Release Trust.
The shares are moved into a tax free trust-based environment and the client benefits from the following:
- Shares can be sold free of Capital Gains Tax
- Re-investment can be made tax free
- Income returns are tax free
- The proceeds of the business sale pass to beneficiaries free of IHT
And here’s the best bit, based on the current valuation of the business of £1m the cost to the client now is £150,000 and no future tax liability. Saving the client literally millions!
Are you feeling trapped by your company pension?
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.
Let me explain…
3) Freedom to choose where to invest.