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Protecting Tax Free cash
As
you generally advise your clients regarding remuneration strategy and more
importantly profits extraction it appears, following research with our existing
clients that, for those who hold executive/directors pension policies and even
those with small self administered schemes, it is now worth a review. This
would examine whether it would be advantageous to transfer the existing
benefits to a section 32 or section 32A (Block transfer) and start funding a
self invested personal pension. For those who have small self administered
schemes it is still possible to transfer to a section 32 and have the section
32 self invested, utilising the commercial property occupied by the sponsoring
employers company.
We
are absolutely convinced from our research that clients will be definitely no
worse off, by taking this approach, and potentially better off in respect of
the Tax Free Cash sum (now called Pension Commencement Lump Sum).
I
would therefore ask you to consider any of those clients who have not yet
received advice from their existing advisers (either due to lack of interest,
inertia or otherwise) to contact our usual adviser or indeed myself, so we can
discuss the above. This applies to director shareholder clients with executive/director
pension plans or small self administered schemes. We are happy to provide a
free analysis service in the first instance. We can prepare a brief
preliminary report with a copy to yourself, advising your clients correctly and
ensuring the pension rules post 6th April 2006 (i.e. ‘A-Day’) will
be of benefit without any downside and a real potential upside.
Close Trading Companies
The
Close Trading Companies offers a simple non controversial means by which
clients can invest in an asset backed business asset that then qualifies for
business property relief.
Under
current rules clients qualify for 100% business property relief after 2 years
entitling them to full exemption from Inheritance Tax on the funds they invest.
Minimum
investment into the Close Trading Companies is £50000.
More
details on the above are available by contacting us on 01924 351000 or
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