Jump to content
House Price Crash Forum
Sign in to follow this  
ILikeBigBoobs

Why Pay Uk Tax Next Year?

Recommended Posts

Double your money with turbo-charged tax relief on new-style pension funds

http://portal.telegraph.co.uk/money/main.j...requestid=30828

an overlooked amendment to the compulsory purchase annuity rules offers a risk-free way for some savers to double their money.

I should say straightaway that it only works for people who are 50 or older and the chemistry is not quite so eye-popping for basic rate taxpayers. Even so, the sums are still pretty good. What it all boils down to is a form of immediate vesting annuity - but without the boring old annuity bit, which used to spoil it.

At present, anybody aged 50 or more can obtain tax relief when they invest in a pension equal to the top rate of income tax they pay - and be allowed to immediately withdraw up to a quarter of the engrossed fund as tax-free cash.

So, for example, it costs high earners only £6,000 to boost the value of their fund by £10,000 before costs and they can withdraw a £2,500 tax-free lump sum straightaway to spend on whatever they please. So the net cost of creating that £7,500 pension pot is only £3,500 for a 40 per cent taxpayer. For basic rate taxpayers, the net cost of the same pension pot is £5,300......

Seems simple :)

Edited by ILikeBigBoobs

Share this post


Link to post
Share on other sites

I have recently been thinking along those lines too, but hadnt actually considered what you are suggesting (very good idea by the way). I was thinking that it might be a good plan to take my pension at 50 with the 25% cash. The reason being that even though it wont be nearly enough to live on, I can get some tax free cash that will have limited effect on any future means tested old age pension. Last thing anyone wants is to get no old age pension because their private pension is enough to live on because they took it a 65 instead of 50.

Share this post


Link to post
Share on other sites
I have recently been thinking along those lines too, but hadnt actually considered what you are suggesting (very good idea by the way). I was thinking that it might be a good plan to take my pension at 50 with the 25% cash. The reason being that even though it wont be nearly enough to live on, I can get some tax free cash that will have limited effect on any future means tested old age pension. Last thing anyone wants is to get no old age pension because their private pension is enough to live on because they took it a 65 instead of 50.

Ah! That I could express myself as well as that :( Unfortunately the prose is plagiarized from the Telegraph article - but, no matter, the idea itself is interesting and will no doubt be taken up by many (including myself).

Edited by ILikeBigBoobs

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.