Funding a Family Pension Trust
Members and their employers may contribute to the scheme. Rowanmoor Pensions' actuarial department can provide advice on the level of contribution necessary to fund for specific pension and tax-free lump sum benefits.
Contributions can be made on behalf of a minor by others, including family members. Members should pay their contributions to the scheme net of basic rate tax. Rowanmoor Pensions will reclaim basic rate tax-relief on their behalf. Members planning to invest or take benefits should bear in mind that it can take up to eleven weeks for the reclaimed tax to be received. Higher rate tax relief should be reclaimed via the member's annual self-assessment tax return.
A Rowanmoor Pensions Family Pension Trust can accept the transfer of any existing protected rights or guaranteed minimum pension you have already accrued. This will allow the member to control the funds by making the investments of their choice. A Rowanmoor Pensions Family Pension Trust cannot be used to receive any new protected rights contributions, also known as rebates.
Member contributions
There is no limit to member contributions but tax relief will only be granted on contributions up to 100% of earnings in any tax year, up to the current annual allowance.
Members who do not have earnings may contribute up to £3,600 gross (£2,880 net) in the tax year.
Employer contributions
Employer contributions are unlimited and will receive tax relief in the year they are made, provided they are wholly and exclusively for the purposes of the employer's trade. In addition, tax relief on the employer's total contributions to pensions will be spread if they are over £500,000 and constitute an increase of 210% or more over the previous year's contributions. The employer's accountant should advise on these aspects. If the total of the employer's contribution for a particular member plus the member's personal contribution exceeds the annual allowance then the member will have to pay 40% income tax on the excess. The annual allowance and the 40% income tax charge do not apply in the year in which a member takes their full benefit entitlement from the scheme (known as full crystallisation).