Expat pension contributions?

Expat pension contributions?

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I am a sole director/shareholder of a UK holding company of trading Ltd co. I receive an annual dividend from the holding company. I am resident in Slovakia where I pay tax on the dividend income. I have no salary income. The company is forecast to make approx £100,000 pre-tax profit this year. I have a SIPP from many years ago when I was in the UK. My pension appears inadequate as I approach retirement age. There are negligible tax breaks for pension contributions where I now live. Can the company pay any money into my SIPP and are any tax benefits to me or the company? 

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By J_G_W
03rd Sep 2014 15:39

For personal contributions you would require being a 'relevant UK individual'. In short, this would require you to have been a resident in the UK at some point during the five tax year immediately before the tax year you are looking to make a contribution.

An employer contribution is different. They can contribute to the existing UK personal pension plan, as the employer payments do not need to supported by member's earnings. As long as they are 'wholly and exclusively' for the purposes of the trade, the company will be able to receive corporation tax relief on their contributions.

As you have mentioned in your question, you had this pension before leaving the UK. That is important as once a client ceases to be UK resident they may no longer be eligible for a new plan, even if they still receive UK earnings. Entitlement to a new UK Personal Pension Plan is often linked to a client residency when joining.

The maximum that can be paid into your pension is limited by the Annual Allowance, currently £40,000 (2014/15).

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