Pension contributions by owner managed companies

Produced by Tolley in association with

Owner-Managed Businesses

Guidance

The tax treatment of pension contributions is complicated and can require specialist advice. This guidance note summarises the treatment of pension contributions into a registered pension scheme by owner managed companies and the relevant restrictions or planning points which apply.

For more detailed information on registered pension schemes, see the Tax relief for pension contributions guidance note.

Unless advisers are suitably qualified and authorised to give investment advice, it is vital that they do not give investment advice of any sort. This includes advice concerning pensions. Advice should be restricted to the tax consequences of making contributions. For further information, see the Regulated investment advice guidance note.

Advantages of registered pension schemes

There are several advantages to using registered pension schemes to extract profits for owner-managed businesses:

•
taxpayers receive a measure of tax relief on pension contributions which they personally make to their pension schemes (see ‘Member contributions ― methods of tax relief’ below)
•
employer contributions are allowable deductions from trading profits to the extent that they are wholly and exclusively

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

David Everett

Partner, Lane Clark & Peacock , Employment Tax

David Everett, is the head of the Pensions Research team at LCP. One of his key roles is to analyse and communicate regulatory and professional developments to audiences both within and outside LCP.David has built up many years of experience in the occupational pensions regulatory field covering a broad spectrum including government policy and legislation, particularly that emanating from the Department for Work and Pensions, the Pensions Regulator, the Pension Protection Fund and other compensation schemes, the Pensions Ombudsman and the Courts and the technical and ethical regulation of actuaries through the Financial Reporting Council and the Institute and Faculty of Actuaries respectively.He also assists the ACA in responding to government consultations.He's the editor of LCP's weekly Pensions Bulletin and undertakes other technical writing for the firm, as well as contributing to TolleyGuidance Employment taxes for the Pensions module.

Popular Articles

Trusts and Inheritance Tax

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Personal Tax

VAT on property disposals

VAT on property disposalsThis guidance note provides an overview of the VAT treatment of selling property that is located in the UK. The UK includes Great Britain, Northern Ireland and the territorial sea of the UK. The sale of any land or building located outside the UK is outside the scope of UK

14 Jul 2020 13:57 | Produced by Tolley Read more

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more

UU��ֱ��