Let’s cut straight to the chase. This is not for everyone. It is only worth exploring further if you can answer “YES” to ALL of the following questions:
- Do you pay higher rate tax on earned income?
- Are you age 50 or over?
- Do you already have medium-term investments/savings?
- Do you expect to revert to paying only basic rate tax at some time in the next 10 years?
If you answered “YES” to all four questions this is worth exploring.
This is totally legal, known to HMRC, and not tax avoidance. It utilises the pension tax changes introduced in 2015.
If you are over 50, a higher rate tax-payer, and have savings/investments this is a “no brainer”. Why would you not claim back all the tax you have paid at 40% and then in a few years (or even immediately if you are over 55) withdraw 25% tax-free and the balance when you only pay tax at 20%?
A post of this nature is not the right place to go into details as there are a number of issues which need to be considered. If you are interested just click here and set up a short Zoom conversation to find out if it is for you. Don’t worry if you have an existing adviser. Implementation can either be through him/her or via one of the one-line platforms such as Hargreaves Lansdown.
Schedule a call with me today.
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