In brief: is there anything to stop a married couple sacrificing salary to their spouse's pension?
I have client who runs a small proffesional services business, but the shares are split 51/49 with the non working spouse who has a rental property but little other income other than a token salary of £4k from the company for services as a company secretary and other minor duties.
Spouse is not a director and is prevented from being one due to the regulations of the business.
Client already has a big pension pot due to her previous role, spouse does not. When looking at pensions, it seems sensible for the spouse to pay into a pension or as a couple they will end up with one big pension and one tiny one on retirement vs both being basic rate tax payers. But to award any sort of addtional salary to then sacrifice (we are talking £20-30k PA) seems tricky as the £4k is already generous for the duties performed.
However could the working director sacrifice their salary, and make the payments into the spouses pension? There would be no issue about the director's salary being larger for the work performed (its currently £9k). I can see materials on line from an IFA point of view advising this is possible, but nothing from a tax angle. I am wondering what the "gotchas" might be, or if I have been missing a trick on what is routine planning.