LTA Ceiling Gone , sell up BTL and direct to pension
Discussion
Hi, I am in a fortunate position having reached my LTA and last year only put a smaller amount into my pension , namely the employers contribution and topped up to keep me out of the effective tax charge of 61% . With the recent changes announced to annual and lifetime allowances and the fact BTL is not as lucrative a it once was do I
1. Sell a property , pay the capital gains and use last years unused pension contribution as carryover plus the £60K I have for the next tax year and max out the pension?
As a Scottish higher rate tax payer benefitting from 42% going in its seems like a no brainer to me
2. Year 2 sell another property and max out again at £60K
3. Likely labour will shut this down if/when the win the next GE and to be honest can't see any reason why they wouldn't as it only benefits a minority
1. Sell a property , pay the capital gains and use last years unused pension contribution as carryover plus the £60K I have for the next tax year and max out the pension?
As a Scottish higher rate tax payer benefitting from 42% going in its seems like a no brainer to me
2. Year 2 sell another property and max out again at £60K
3. Likely labour will shut this down if/when the win the next GE and to be honest can't see any reason why they wouldn't as it only benefits a minority
Mr Whippy said:
Will labour put a load of extra tax on big pensions too though?
Outside of a reversal or at least an amendment of the LTA abolishment I’m not sure additional tax is a particular vote winner when saving for Pension has been deeply encouraged. Then hitting say Doctors who have been encouraged to continue working also probably isn’t too clever.
Maybe therefore ?
In general terms, it seems a reasonable plan to me. As ever with pensions, it will depend on your personal circumstances and expectations in retirement.
One thing you haven’t mentioned and is worth remembering is that whilst the LTA will be removed, the limit on tax free withdrawal remains (@25% of the current LTA), so it depends on your own likely income in drawdown (or income from a DB scheme) as to how beneficial the tax relief now will really be.
One thing you haven’t mentioned and is worth remembering is that whilst the LTA will be removed, the limit on tax free withdrawal remains (@25% of the current LTA), so it depends on your own likely income in drawdown (or income from a DB scheme) as to how beneficial the tax relief now will really be.
alscar said:
Mr Whippy said:
Will labour put a load of extra tax on big pensions too though?
Outside of a reversal or at least an amendment of the LTA abolishment I’m not sure additional tax is a particular vote winner when saving for Pension has been deeply encouraged. Then hitting say Doctors who have been encouraged to continue working also probably isn’t too clever.
Maybe therefore ?
And these people are going to be 'super rich' pensioners, not the average hard working heroes of society.
Before the pension freedoms brought in by the Conservatives, as far as I'm aware, there would have been no tax free cash, and only buying an annuity... a position long standing since Labour were in power for well over a decade.
Before their time, weren't most pensions more in the realm of DB etc?
So for all practical views on what might happen, Labour are new in the 'modern' era of pensions, and who knows what they'll do.
Mr Whippy said:
Yes but this is Labour.
And these people are going to be 'super rich' pensioners, not the average hard working heroes of society.
Before the pension freedoms brought in by the Conservatives, as far as I'm aware, there would have been no tax free cash, and only buying an annuity... a position long standing since Labour were in power for well over a decade.
Before their time, weren't most pensions more in the realm of DB etc?
So for all practical views on what might happen, Labour are new in the 'modern' era of pensions, and who knows what they'll do.
Yup hence my maybe although I suspect they may (if/ when they first get in ) confine themselves to the reversal of the LTA abolishment first and leave other punishments for the working and pension savers population for a while. And these people are going to be 'super rich' pensioners, not the average hard working heroes of society.
Before the pension freedoms brought in by the Conservatives, as far as I'm aware, there would have been no tax free cash, and only buying an annuity... a position long standing since Labour were in power for well over a decade.
Before their time, weren't most pensions more in the realm of DB etc?
So for all practical views on what might happen, Labour are new in the 'modern' era of pensions, and who knows what they'll do.
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