Offsetting the Tax element of a Redundancy Payment.

Black_Horse_Happy

Hi,
I'm looking for some advice on ways of mitigating the amount of tax I would have to pay on my redundancy package.
I know the first £30K is tax free but what ways are there of using any additional funds to try and avoid paying tax on them as well?
The back ground to this is that after 31 years with the company I am being made redundant, with such a number of years service my package is over £30K and I would like to try and avoid giving the tax man any money but at the very least as little as possible.
I've heard that in certain circumstances I can waive some of my Redundancy and purchase additional pension, but is there a limit on this in terms of amount and also do you have to be a particular age to be able to ask for this benefit?
Also does anyone know of any other wrinkles I might be able to ask for in terms of avoiding tax on the redundancy amount?
I should say I work in the banking industry and am a member of a final salary pension scheme.
One final question, I live in the Romford area so does anyone know of a good accountancy or financial advisors firm who I might be able top discuss things with?

Cheers.

swiss69

You can ask your company to pay the excess into your FS pension scheme and it will buy added years for you. There is no age restriction on this. They should be able to tell you how much extra this will mean and you can then make a decision on whether it is worth it or not.
You can get income tax relief by investing in Venture Capital trusts (VCT's) or Enterprise Investment Schemes (EIS) but there are strict rules attached and these types of investments can carry considerable risk.

jonathon_hart

Hi.

It woudl depend on the rules of the scheme as to whether you get added years or it is invested into an associated money purchase section of the scheme.

There are no particular limits that apply to this type of contribution except for the limits that apply to pensions in general, e.g the Annual Allowance and the Lifetime Allowance - although again check there are no scheme specific rules. It simply needs the agreement of your company and should be written into your redundancy agreement. I'm not sure what options other than pensions are available for you from a redundancy agreement.

If you are looking for Financial advice the only thing we can really suggest is that you try www.unbiased.co.uk to look for a Financial advisor local to you, or look in your local yellow pages.