More Tax Savings for Company Directors
Guest Post by our partners at Clear Financial
As a Company Director there are a great number of ways to save tax and one of the very best is through the use of pensions. It is entirely possible for a limited company to contribute directly into pensions for both directors and employees; this avoids employer’s 13.8% National Insurance, 20% Corporation Tax and of course all the income or dividend tax that would normally be paid on getting your money out of the company. Once within a pension all investment growth that you receive will be tax free allowing funds to grow far more than they would outside a pension in similar investments. After age 55 you will be able to take the money accrued out as you require with 25% of it being entirely tax free and the rest being taxed at your marginal rate of tax.
The advantages of pensions are clear for those planning their retirement but what happens to the money if you pass away before you get there? If you pass away before age 75 your money in pensions will be passed on to the beneficiary that you have left it to completely free of tax. If you pass away after age 75 then it can be inherited as a pension and used by a future generation. Therefore, whatever happens, your pension will be available to help you or your family.
Pensions tax rules are complex, so it makes sense to talk to your accountant and financial adviser about all your options in building your future wealth. Get in touch to find out more.
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