A client who operates an owner-managed limited company intends to retire in a few months.
He is planning to make an employer pension contribution to his personal pension of £100k before the company ceases in order to obtain Corporation Tax relief. He has over £50k pension annual allowance to be carried forward from the previous 3 years & has made no contributions in the current tax year, so this should not generate a tax charge.
Once the company ceases trading, the client intends to commence taking his pension & receive his 25% tax free lump sum. Would this be frowned upon by HMRC - i.e. a large contribution receiving tax relief is then partially taken out in a tax free environment within the same tax year?
I haven't been able to find anything from HMRC that states there would be a problem, but thought I'd ask to see if anyone knows of HMRC's stance on this matter.