|
For any company directors or employees, a company pension is one of the most tax efficiant ways of transferring profits from the company. Contributions by a company to a pension plan do not suffer any tax penalties and can be written off by the company against corporation tax. The employer must contribute at least one tenth of the total contributions made in to the scheme. There are two types of company pension scheme:
- Defined Benefit - Where the retirement benefits are based on the final salary at retirement as defined under the rules of the scheme and the number of years worked with the company.
- Defined Contribution - Where the benefits are directly related to how much the employer, and perhaps the employee have contributed to the scheme. The total contribution plus the investment growth determine the total value of retirement fund.
Retirement can be taken between the ages of 60 and 70, or proprietary directors may take retirement up to age 75. On retirement you have several options;
(1) 25% of your fund value tax free.
(2) Encash the balance subject to a deduction of income tax.
(3) Invest the rest of the fund in an annuity and receive a salary for the rest of your life.
(4) Invest in an Approved Retirement Fund.
Contact us for more information
To arrange a review contact Barker Independent Financial Advisers 1850 373 222.
Find out more about...
|
|
|
