Where to get advice re-funding forced early retirement?

jamesd

bigfreddiel wrote: »

The forum rules don't allow for us to give you any advice

The forum rules allow us to give as much advice as we want. What is prohibited is "8.2.15 give investment advice by way of business or make financial promotions". Most of us don't work in financial services so won't be able to give advice by way of business or make a financial promotion of some regulated product or service.

FatherAbraham

BoudiccaUK wrote: »

I looked at taking a salary and paying NI that way, but from what I understood I would then be taxable (with the rentals) and this would outweigh any advantage of me paying less for NI.

You have worked out that throwing away a free State pension is to your financial advantage?

The point made was that you wouldn't need to pay any NI if your salary is at the LEL, but would still be credited with contributions entitling you to state pension and other bennies.

Would you care to share your figures?

Warmest regards,
FA

xylophone

You could take the LEL salary from the company and thereby have your NI paid and then reduce your taxable income by making pension contributions from your salary into your own private pension?

http://www.litrg.org.uk/tax-guides/tax-basics/what-national-insurance

http://www.pruadviser.co.uk/content/knowledge/technical-centre/tax_relief_members_contributions/

BoudiccaUK

FatherAbraham wrote: »

The point made was that you wouldn't need to pay any NI if your salary is at the LEL, but would still be credited with contributions entitling you to state pension and other bennies.

Would you care to share your figures?

Warmest regards,
FA

Just read this bit again. So say I make £8,000 taxable profit from my rentals. This no longer qualifies as self-employed so no longer entitles me to pay lower (Class 2?) NI contributions. I could take a salary from the company, but I have been told that there is a minimum I would need to take for me to then qualify for NI contributions. That minimum would then take me over the tax allowance so I would pay tax. The amount of tax + NI I would pay would be more than the voluntary (Class 4?) NI contributions.

I am fully paid up with voluntary NI contributions.

I don't mind paying tax or NI contributions, but if I legally can pay the minimum possible and I am still qualifying for a state pension then I'm happy.

If there is a better way than the accountant suggested then I really am all ears.

BoudiccaUK

xylophone wrote: »

You could take the LEL salary from the company and thereby have your NI paid and then reduce your taxable income by making pension contributions from your salary into your own private pension?

http://www.litrg.org.uk/tax-guides/tax-basics/what-national-insurance

http://www.pruadviser.co.uk/content/knowledge/technical-centre/tax_relief_members_contributions/

So, if I've understood correctly:
I have my rental income - let's estimate around £8,000.
I take a salary from the company - enough for me to qualify for NI contributions.
My total income will then be above the tax free allowance.
I open a personal pension and pay in the amount that takes me above the tax allowance?
I don't pay tax?

It's Sunday evening and I've had a glass of wine so forgive me if I'm getting the wrong end of the stick - I'll be able to concentrate harder on Monday!

jamesd

You pay 80% of the amount above the personal allowance into a pension. 25% is added to it by HMRC and that combined value is the gross amount in the pension.

xylophone

You pay 80% of the amount above the personal allowance into a pension. 25% is added to it by HMRC and that combined value is the gross amount in the pension.

But you need relevant earnings to support your contribution if this is above £2880 net (£3600 gross).

http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/tax-relief-and-contributions

xylophone

For relevant earnings read the Pru link carefully.

BoudiccaUK

xylophone wrote: »

For relevant earnings read the Pru link carefully.

From the Pru link:
"It is sometimes easier to think about what is not relevant earnings and this includes pension income, dividends and most rental income."

I have both rental income and dividends which take me up to my tax free limit.

xylophone

You make the pension contribution from your relevant earnings which will be your salary......

In certain limited cases RE can include rental income see Pru link.

And those with no relevant earnings can contribute up to £2880 net

£3600 (gross).

Your accountant should be able to make all clear - he could read the links as well?