Can I ask an income tax question in here?
Discussion
I keeping get lost over what is legal in which forum at the moment but am looking for some advice.
If a chap were earning say 60k as a basic, and after some hard work was due a bonus of £100k in one lump. What would he be able to do to avoid the largest tax PAYE payment of his life?
He has an open minded but legally bound of course, boss.
For ref "chap" is not me, but good friend with a lump of debts to pay off and an expensive wife so would like to see, or largest % of, the cash as soon as possible!
If a chap were earning say 60k as a basic, and after some hard work was due a bonus of £100k in one lump. What would he be able to do to avoid the largest tax PAYE payment of his life?
He has an open minded but legally bound of course, boss.
For ref "chap" is not me, but good friend with a lump of debts to pay off and an expensive wife so would like to see, or largest % of, the cash as soon as possible!
You need the advice of a practising Accountant. EricMc on here is such a man.
A payment of this size needs careful thought. And specific detailed paid advice.
Pension could be an answer but I personally would not trust any pension fund in the long term I am much happier with bone fide self administered funds.
You also may have to spread the payment over more than one year there are contributory limits relating to overall earnings.
The cash suggestion is not a good idea unless you wish to attract the Revenue in full force a payment of this size is way beyond such methods.
Once you upset them, they never ever forget.
A payment of this size needs careful thought. And specific detailed paid advice.
Pension could be an answer but I personally would not trust any pension fund in the long term I am much happier with bone fide self administered funds.
You also may have to spread the payment over more than one year there are contributory limits relating to overall earnings.
The cash suggestion is not a good idea unless you wish to attract the Revenue in full force a payment of this size is way beyond such methods.
Once you upset them, they never ever forget.
Much appreciated all, pension while an idea is not a flyer as he is 35 and unable to lay hands on said pension for quite some time. Credit cards to pay off etc so would like it as soon as poss(wifes credit cards in fact!)
He does have a lump in pension he is trying to get at currently but still locked out due to Labours great ideas!
He does have a lump in pension he is trying to get at currently but still locked out due to Labours great ideas!
Without wishing to be excessively prudent if your friend has serious credit cards debts and needs the money the saving in interest will exceed any other investment he might make.
Equally if he is also considering raiding his pension given an income of this level it might be prudent to review his lifestyle choices before his spending causes him a real problem.
Years of experience have taught me that getting overall control over your personal finances early on in a career is a good move.
Yes there must be opportunities taken, holidays made, nice things acquired.
But pension fund raiding on this level of income. Cannot recommend that.
Equally if he is also considering raiding his pension given an income of this level it might be prudent to review his lifestyle choices before his spending causes him a real problem.
Years of experience have taught me that getting overall control over your personal finances early on in a career is a good move.
Yes there must be opportunities taken, holidays made, nice things acquired.
But pension fund raiding on this level of income. Cannot recommend that.
walm said:
Eric is indeed the right man for this but my tuppence is:
- He owes the tax - pay it.
- Only way to minimise might be to ask for £90k and then £10k, thus avoiding 50% tax on that £10k (since the 50% kicks in at £60k+£90k = £150k).
- DO NOT RAID THE PENSION.
Absolute frigging madness.
I agree with all this.- He owes the tax - pay it.
- Only way to minimise might be to ask for £90k and then £10k, thus avoiding 50% tax on that £10k (since the 50% kicks in at £60k+£90k = £150k).
- DO NOT RAID THE PENSION.
Absolute frigging madness.
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