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High earner and pension option

Client earns about £80k, no pension but would like to invest £34k to reduce and save child benefit

Client is earning about £80k and wishes to reduce tax implication and save child benefit.

they do not currently have a private pension so looking to open SSAS what are drawbacks or benefits of this if anyone has opened one? 

Client js happy to invest £35k into pension if need be. Anyone can advice what’s best? 

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12th Mar 2019 10:52

I generally advise people to seek proper investment advice from a qualified professional and not to let the tax implications be the only driving factor.

Presumably if they went off half cocked and invested the £35K in some scheme not fit for purpose, the £1K or so child benefit they saved wouldn't be much of a mitigating factor.

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By mumpin
to Duggimon
12th Mar 2019 14:00

Presumably if they went off half cocked and invested the £35K in some scheme not fit for purpose, the £1K or so child benefit they saved wouldn't be much of a mitigating factor.

But they would save a bunch of 40% tax also...

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12th Mar 2019 11:07

Unless you are qualified, regulated and insured to give investment advice, don't.

You can tell your client what the tax consequences are of making pension contributions but that's it.

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By Alex_T
12th Mar 2019 13:13

I never give investment advice for fear it would come back to bite me in the bottom. By all means, explain the tax benefits of having a pension etc. but that's it.
Best of luck!

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12th Mar 2019 13:22

Thank you all for your advice, I have stated what the tax implications would be and if they wish to invest then to speak to a qualified investment advisor. Investing in a private pension would reduce their tax liability but as stated it’s dependent if the pension is fit for purpose. I have heard about SSAS but unsure of its benefits.

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to 27Dimple
12th Mar 2019 15:21

27Dimple wrote:

I have heard about SSAS but unsure of its benefits.

Not your problem. As long as the contributions are made to a qualifying pension scheme for UK tax purposes, that's all you need to know.

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By Matrix
12th Mar 2019 13:28

I agree that is a huge amount to invest to obtain child benefit but not your call, just advise on the tax implications with a big disclaimer on investment advice.

The max is £32k less any employer contributions plus any unused allowances b/f. They would only need to pay £24k net to get down to £50k.

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25th Mar 2019 17:39

No down-side to a SSAS-Our Practice uses them for all our owner managed limited companies for tax planning. They cost c £1500 to set up and £500 on-going compliance fees. They are the "Rolls-Royce" of pension schemes.

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