Husband and Wife, Directors and SIPPS

dunstonh

Personal contributions are made to maximise our personal tax benefits, my wife gets 20% added to her personal contributions and I get the relief when I submit my Tax return.

But company contributions save 19% corporation tax and avoid 7.5% dividend tax. That is greater than the 20% tax relief.

segovia

dunstonh wrote: »

But company contributions save 19% corporation tax and avoid 7.5% dividend tax. That is greater than the 20% tax relief.

Its something I need to look at but I always consider it as two separate revenue streams.

1, Minimum salary from Ltd Co and low dividends, pay as much as I can from Ltd into Pension to reduce Corporation Tax.

2, Personal Tax Liability from Rental Income + Salary & Divs from Ltd Company is reduced by making personal contributions into my personal pension which is a Series 920 and does not receive tax contributions at the source.

Our accountants seem happy with this arrangement and have not advised anything different.

segovia

dunstonh wrote: »

But company contributions save 19% corporation tax and avoid 7.5% dividend tax. That is greater than the 20% tax relief.

PS Dunstonh

I am not drawing dividends after profits from my Ltd and then paying the dividends into my personal pension, I could have worded it better. Was that your assumption?

J

Sibbers123

segovia wrote: »

Yes I know, we make employer contributions from our Ltd Company and we make personal contributions from our rental income that has nothing to do with our Ltd Company

That's not how it came across in your original post.

If you have accountants, they are probably best placed to give you the appropriate advice or at least point you in the right direction.

segovia

Sibbers123 wrote: »

That's not how it came across in your original post.

If you have accountants, they are probably best placed to give you the appropriate advice or at least point you in the right direction.

Yes, I know, It wasn't very well described.

J