Can income go to a trust fund and be received over time after retirement?

james-harris

This is similar to my recent post in Savings and Investments forum. Can an individual have income paid gross into a trust or similar and take money out of that trust over time?

Say in the last few years of working someone was going to earn income that would be taxed at higher rate. Could some/all of the income be placed in a trust and the individual receive income from that trust at a rate that excludes higher-rate tax?

It would allow someone to receive his or her last few years of income at standard tax rate rather than pay higher-rate tax on it.

Could this be done wholly within the UK? Would offshore arrangements be needed? Is it possible?

James

le_loup

Yes. It's called a pension.

james-harris

le_loup wrote: »

Yes. It's called a pension.

Not really. At least 75% of a pension has to buy an annuity, as I understand it. One can only take 25% of pension savings as direct income.

James

sleepless_saver

james-harris wrote: »

Not really. At least 75% of a pension has to buy an annuity, as I understand it. One can only take 25% of pension savings as direct income.

James

No, you don't have to buy an annuity with your pension. There is an alternative.