Limited Company - LISA/Pension

brucethefish

Hi

Im self employed via my own limited company

Im able to save around £900-£1000 pm, and at the moment split between maxing Lisa and employers pension contributions

Just wondering peoples thoughts on this; carry on or just pay into pension, I get corporation tax relief on this, but also 25% on Lisa - it also isn't taxed as and when I draw down on it 
Im 44 too 

Cheers

kempiejon

Do you have plenty of other savings, and investments, ISA etc?
Do you own a property? Sure you know LISAs are restrictive on what and when you can spend, much like a pension. To my mind, for a home owner, there's not much in it. SO liked the idea, me not so much, I just use a regular ISA and SIPP.

Does the corporation tax saving making SE pensions better? A smaller tax bill.

eskbanker

You'd need to make a full like-for-like comparison, starting from company money right through to the equivalent amount of money finally in your personal account once withdrawn from the wrapped products (which will vary according to the personal income tax band you're in at the time) - the pension route is efficient from a corporation tax perspective, and in order to pay into a LISA you first have to get the money out from the company into your personal account, whether that's via dividends or salary, which in turn involve different taxation at company and/or personal level.

eskbanker

kempiejon said:

Does the corporation tax saving making SE pensions better?

By definition, corporation tax relates to companies, not self-employment, so the latter status doesn't apply to limited company environments, even though OP inaccurately refers to "Im self employed via my own limited company".

brucethefish

Cheers all, Ive got about £15k in an Isa, and about £10k to overpay mortgage when the deal ends this year

Ive got my own house so the Lisa is for retirement as oppose to a FTB, the initial idea being for that to pay off a buy to let mortgage

dunstonh

Pension contributions get corporation tax relief and you get money out of the company without paying dividend tax.

A LISA contribution would mean you have paid corporation tax and dividend tax before you put it into the LISA.