Pension carry forward + end of Ltd company year
Discussion
I have my own Ltd co, and have not paid into a pension for 5 years as I wanted the cash as a safety net.
Things are different now so I need to catch up with my pension. I believe the yearly limit is 40k, and I can also use the past 3 years allowances, ie;
2013-14 40k
2014-15 40k
2015-16 40k
2016-17 40k
As I see it to maximise my use of old allowances I need to pay 80k before the end of this financial year to use this years allowance, and the 2013-14 allowance. If not I will lose the 2013-14 allowance.
My company financial year end is February so I assume that it would be best for me pay 80k into the pension before the end of January, so that I reduce my Corp Tax liability in the current company year?
I've sent the same question to my account but I don't expect an answer until the new year hence asking here as well
Things are different now so I need to catch up with my pension. I believe the yearly limit is 40k, and I can also use the past 3 years allowances, ie;
2013-14 40k
2014-15 40k
2015-16 40k
2016-17 40k
As I see it to maximise my use of old allowances I need to pay 80k before the end of this financial year to use this years allowance, and the 2013-14 allowance. If not I will lose the 2013-14 allowance.
My company financial year end is February so I assume that it would be best for me pay 80k into the pension before the end of January, so that I reduce my Corp Tax liability in the current company year?
I've sent the same question to my account but I don't expect an answer until the new year hence asking here as well
98elise said:
I have my own Ltd co, and have not paid into a pension for 5 years as I wanted the cash as a safety net.
Things are different now so I need to catch up with my pension. I believe the yearly limit is 40k, and I can also use the past 3 years allowances, ie;
2013-14 40k
2014-15 40k
2015-16 40k
2016-17 40k
As I see it to maximise my use of old allowances I need to pay 80k before the end of this financial year to use this years allowance, and the 2013-14 allowance. If not I will lose the 2013-14 allowance.
My company financial year end is February so I assume that it would be best for me pay 80k into the pension before the end of January, so that I reduce my Corp Tax liability in the current company year?
I've sent the same question to my account but I don't expect an answer until the new year hence asking here as well
Pretty much, yes.Things are different now so I need to catch up with my pension. I believe the yearly limit is 40k, and I can also use the past 3 years allowances, ie;
2013-14 40k
2014-15 40k
2015-16 40k
2016-17 40k
As I see it to maximise my use of old allowances I need to pay 80k before the end of this financial year to use this years allowance, and the 2013-14 allowance. If not I will lose the 2013-14 allowance.
My company financial year end is February so I assume that it would be best for me pay 80k into the pension before the end of January, so that I reduce my Corp Tax liability in the current company year?
I've sent the same question to my account but I don't expect an answer until the new year hence asking here as well
Remember though that pension contributions run on TAX years so you have until 5th April 2017 to do it, meaning you would claim corp tax relief in a future year.
You should declare contributions above the Annual Allowance on your SA IIRC.
Jockman said:
Pretty much, yes.
Remember though that pension contributions run on TAX years so you have until 5th April 2017 to do it, meaning you would claim corp tax relief in a future year.
You should declare contributions above the Annual Allowance on your SA IIRC.
If I do it before the end of my company year then I will save (defer in reality) the CT for this company year won't I ? I've taken very little out of the company this year so will have a big CT bill. If I'm aiming to pay a lot into the pension then I'm assuming its best to do it before the end of my company year, rather then the financial year?Remember though that pension contributions run on TAX years so you have until 5th April 2017 to do it, meaning you would claim corp tax relief in a future year.
You should declare contributions above the Annual Allowance on your SA IIRC.
98elise said:
If I do it before the end of my company year then I will save (defer in reality) the CT for this company year won't I ? I've taken very little out of the company this year so will have a big CT bill. If I'm aiming to pay a lot into the pension then I'm assuming its best to do it before the end of my company year, rather then the financial year?
The contribution will indeed need to clear your company bank account by 28/02/2017 to get corporation tax relief for the fye 28/02/2017.Edited by PurpleMoonlight on Thursday 29th December 15:37
98elise said:
If I do it before the end of my company year then I will save (defer in reality) the CT for this company year won't I ? I've taken very little out of the company this year so will have a big CT bill. If I'm aiming to pay a lot into the pension then I'm assuming its best to do it before the end of my company year, rather then the financial year?
Absolutely. Just don't panic if cashflow were to be tight and you didn't have all £90,000 available in the next 8 weeks.Remember Corp Tax rates are reducing too.
LeoSayer said:
Just a couple of points from my understanding...you can only use the carry forward allowances if you actually had those earnings and a pension (even if you didn't contribute) in those prior tax years.
Yes, correct. You had to have had a scheme to which you could have made contributions.ukshooter said:
LeoSayer said:
Just a couple of points from my understanding...you can only use the carry forward allowances if you actually had those earnings and a pension (even if you didn't contribute) in those prior tax years.
Yes, correct. You had to have had a scheme to which you could have made contributions.98elise said:
I do, i have 3 other smaller pensions that I could have contributed to. I'll actualy be putting 2 of those into my new pension to tidy things up a bit.
Good luck with that! From recent experience the combination of caution over scammers (laudable) and unreasonable fear over future claims of mis-selling means that some providers are making it both expensive and very difficult to move pensions from one provider to another.ukshooter said:
LeoSayer said:
Just a couple of points from my understanding...you can only use the carry forward allowances if you actually had those earnings and a pension (even if you didn't contribute) in those prior tax years.
Yes, correct. You had to have had a scheme to which you could have made contributions.I can contribute to my existing pensions, but I've no idea if I could stick 80k in as a lump sum in a single year. I seem to remember at least one of my old pensions has a limit as to what I can pay in each year.
The sum will be going into a new SIPP so that's not an issue, but i need to make sure the payment qualifies for carry forward
I've looked on the pensions advisory service website (and a few others) and its not mentioned.
Edited by 98elise on Thursday 5th January 12:46
PurpleMoonlight said:
The annual allowance and carry forward of any unused allowance is relative to HMRC rules. It is not subject to any contribution cap imposed by the pension scheme.
Thanks, that makes sense given that you can use the carry forward to contribute to a new pension rather than the pension you had at the time.Holy thread resurrection Batman!
I find myself in the same situation as the OP... would appreciate some advice on a couple of points...
- is it (still?) the case that payments from my Ltd Company are not linked to my personal earnings, only the £40k annual allowance? Such that I could contribute £80k, thus using my 18/19 and under the carry forward rule 15/16 allowances despite the fact my personal income has been much less?
- the payment cannot exceed my Ltd Company gross profit for this FY?
- I must have had a registered pension scheme open that I could have contributed to, but do not have to have contributed in the last 4 years. I do have one. Must I contribute to this scheme, or could I open a new one?
Thanks in advance...
I find myself in the same situation as the OP... would appreciate some advice on a couple of points...
- is it (still?) the case that payments from my Ltd Company are not linked to my personal earnings, only the £40k annual allowance? Such that I could contribute £80k, thus using my 18/19 and under the carry forward rule 15/16 allowances despite the fact my personal income has been much less?
- the payment cannot exceed my Ltd Company gross profit for this FY?
- I must have had a registered pension scheme open that I could have contributed to, but do not have to have contributed in the last 4 years. I do have one. Must I contribute to this scheme, or could I open a new one?
Thanks in advance...
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