Employer Pension Contribution

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.

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AndrewSullivan |

Wholly and exclusively

Steve Kesby |
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