Greetings!
Welcome to the January edition of 'Your Money Matters'. We are covering in this edition the new tax allowance from April 2011 and we will be looking in detail at the changes to pensions and in particular the new Drawdown rules. |
| Financial Tips |
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In each newsletter we aim to provide you with one or two financial strategies that we follow when advising.
Are you paying more tax than you should be?
To learn more about claiming tax back that you should not have paid please click here. |
| Reduce the Cost of Life Cover |
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Do you pay your life insurance premiums personally?
If so they are being paid out of taxed income.
If you are a company director your company could pay these for you and treat the payment as a business expense. The payment would not be treated as a benefit in kind and not subject to National Insurance Contributions (yet another tax!!)
This relatively unknown arrangement is very tax efficient.
Even if you are not a company director - as an employee you may be able to still benefit from this. You employer would have to agree to set up the policy for you with you paying the premiums by reducing your salary accordingly.
Whether or not you currently have life assurance click here to read an article on Relevant Life Policies.
If you wish to know more please contact your Financial Adviser at Firth & Scott Financial Services Ltd who will be more than happy to review your situation and see if you would be better off with a Relevant Life Policy. |
| New Drawdown Pension Rules |
 In the Autumn edition of 'Your Money Matters' I explained that our coalition government had made various proposals to change the rules relating to pension drawdown contracts.
Following consultation with interested stakeholders they have now made an announcement of the clauses that will be in the Finance Bill 2011 which you can read an article on by clicking here.
Article written by Steve Hopkins FCII |
| Tax Allowances, Rates & Thresholds for 2011/2012 |
 The government have recently published for the tax year 2011/2012 tax allowances, rates and thresholds for income tax and National Insurance Contributions as well as the limit for Individual Savings Accounts.
Some of these have been announced previously but for a summary of the changes that will affect us all please click here.
Article written by Steve Phillips ACII |
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Restrictions on Pension Tax Relief from 6 April 2011 |
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From 6 April 2011 the annual allowance for pension contributions will be reduced from £225,000 to £50,000 and there are no proposals to increase this level again until 2015/2016. Anti forestalling measures had already imposed a more severe restriction of £20,000 for higher rate earners.
The rules relating to contributions in excess of the annual allowance are very complex and apply to defined benefit schemes as well as final contribution schemes.
Carry forward will be available to use up un-used allowances from the previous three tax years or pension input periods which will not be compulsory assigned with the tax year.
So if you are considering making pension contributions in the current tax year we would suggest you contact your Financial Adviser as soon as possible. |
