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Tax implications of corporate pension contributions.
My daughter is the sole director of a thriving private limited company. Her annual taxable income is subject to higher rates of tax and she has a private pension scheme to which regular net monthly contributions are made and occasionally a substantial additional net premium.
Her financial adviser has requested that in future her company may pay the monthly contributions gross and charge them against the profits. Because it is her personal scheme I am concerned that the contributions can be paid this way.
Because my daughter is paying higher rates of tax may I assume that less tax will be saved personally compared with the benefits of corporation tax relief?
Comments would be very welcome.
Query 19 270– Worried Dad.
Reply by NTN
Pension contributions by the employer will usually be more tax efficient.
In general terms it is more efficient for a company...
