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Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.0
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Hi @hyubh ...hyubh said:zagfles said:dunstonh said:bostonerimus said:Wonderful news if you have enough lifetime income to take advantage, but it will only increase wealth inequity. It's a nice gift for the best off and irrelevant to the majority of people.
Do not forget that the super wealthy get their annual allowance tapered. So, they didn't get £40k before and wont get £60k now. The most they could pay in is £4,000 and that is going upto £10,000.
The changes to the pension allowances affect basic rate taxpayers through to the lower end of high earners (sub 250k a year)
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fizio said:Malthusian said:fizio said:What about those already having use 100% LTA? Can they start a new pension - though the 25% tax-free makes it less attractive
It will be interesting to see the detail and how this effects people who fully crystallised with an LTA of £1 million. Will we have to declare how much PCLS we've taken rather than how much LTA we've used?25% tax free ?To me the 40% relief - when option presented itself - was always a bit of a "no brainer" - changing the 20% contributions less so. But for me that 40% only occured from abormally high overtime when younger. So did boost my contributions one in every few years - just to avoid higher rate tax.Hoping to get that out at 20% - and with 25% lump sum - even 20% has some merit.When LTA came in never even thought about it - but my IFA did when chatting about other issue - after it dropped to £1m.0 -
bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.
To extract £67k a year you could argue that at a 4% withdrawal rate that's a pot of £1.675mn built up, which is likely done with hrt on the way in.4 -
Cus said:bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.
To extract £67k a year you could argue that at a 4% withdrawal rate that's a pot of £1.675mn built up, which is likely done with hrt on the way in.
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bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.
"Real knowledge is to know the extent of one's ignorance" - Confucius0 -
bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.
- You make contributions from salary which would be taxed at 45% income tax rate
- You make a contribution from salary which would have caused Personal Allowance withdrawal (60% marginal rate of income tax)
- You make contributions using salary sacrifice (especially if employer refunds employer saving)
- More favourable inheritance tax treatment than unwrapped funds
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bearshare said:Cus said:bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.
To extract £67k a year you could argue that at a 4% withdrawal rate that's a pot of £1.675mn built up, which is likely done with hrt on the way in.0 -
kinger101 said:bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.0
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hugheskevi said:bearshare said:Am I missing something? Surely, if you build up a large pension, with HRT relief on the way in, then you will be paying HRT on most of it 'on the eay out'. (Ignoring company contributions). I.e. no benefit to paying in, beyond the - limited - tax free lump sum.
- You make contributions from salary which would be taxed at 45% income tax rate
- You make a contribution from salary which would have caused Personal Allowance withdrawal (60% marginal rate of income tax)
- You make contributions using salary sacrifice (especially if employer refunds employer saving)
- More favourable inheritance tax treatment than unwrapped funds
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