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Key considerations for meeting the new tax year deadline

With a new tax year looming and recent changes to pensions legislation, within the next few weeks there are considerable opportunities for individuals to make new or additional pension provision before the new tax year commences.

For business owners in a controlling director capacity, there are a number of pension planning solutions to the above changes and restrictions, which allow a more valuable pension benefit to be accumulated, than would ordinarily be permitted using money purchase (defined contribution) schemes such as a SSAS or SIPP. The Rowanmoor Defined Benefit SSAS, which operates by defined benefit rules, is a company-sponsored occupational scheme for less than 12 members and can facilitate these changes more cost effectively.

For individuals that have triggered the money purchase annual allowance, the Defined Benefit SSAS allows carry forward of up to three years of unused annual allowances via company contributions (which the client may already have thought lost, by triggering the money purchase annual allowance). It also means the full current tax year’s £40,000 annual allowance could potentially be utilised (subject to contributions already made and if tapering rules also apply).

For individuals whose annual allowance is reduced due to tapering rules, the reduced annual allowance could be used to secure defined benefit provision via a Rowanmoor Defined Benefit SSAS. If an individual has had their annual allowance reduced, the Defined Benefit SSAS could provide a more valuable pension benefit when compared to the same reduced annual allowance being used via a contribution into a money purchase scheme.

With the new tax year deadline just a matter of weeks away, now is the time to get new SSASs or SIPPs established. Contact us for further information.

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