1 – Is it possible beyond the age of 75 for a member to continue paying contributions into a registeredScheme?
Technically speaking the answer is yes, there is no specific legislation that disallows this from happening. Nevertheless, there will be no tax relief available which in most instances leads to a situation wherescheme providers will themselves not allow contributions from those over 75.
2 – I’m thinking of using Carry-Forward to contribute in excess of £40,000 – Do I need to let HMRC Know?
In a word, no. HMRC does not need to be informed in advance if you intend to use carry-forward. In fact, you won’t actually have to report anything by way of a self-assessment tax return form either, just as long as the contributions you make remain within annual allowances along with carry-forward limits.
3 – What changes have been made to Stamp Duty?
In the instance of any property where the final purchase price totals in excess of £125,000, the buyer of the property is liable for paying Stamp Duty Land Tax. In terms of how much is actually paid, Stamp Duty Land Tax rates vary from 2% to 12% in accordance with the total cost of the property in question. As is the case with income tax, it is not the entire value of the property that is taxed at the applicable rate, but rather the portion of the property’s value that exceeds the set boundaries.
- If the value of the property totals £125,001 to £250,000, any amount over the lower boundary is taxed at 2%.
- If the value of the property totals £250,001 to £925,000, any amount over the lower boundary is taxed at 5%.
- If the value of the property totals £925,001 to £1.5 million, any amount over the lower boundary is taxed at 10%.
- For properties with a value in excess of £1.5 million, taxation above the boundary is set at 12%.
4 – Is it possible to access a portion of my pension funds as an Uncrystallised Funds Pension Lump Sum (UFPLS), while at the same time taking the maximum Tax-Free Cash allowance?
Unfortunately, the answer is no. When a UFPLS payment is made, the 75% taxable and 25% tax-free allowance both apply. The 75% proportion will be taxed at the applicable income tax rate – if more than 25% tax-free cash is required, flexi-access drawdown options can be useful.
5 – How does the £10,000 Annual Allowance work if you are involved in a Final Salary Scheme?
Defined contribution schemes (DC) are restricted in that a maximum money purchase annual allowance of £10,000 can be paid in. Alongside the contributions made to DC schemes, it is also possible to build benefits in defined benefit schemes to a maximum value of £40,000 minus how much is paid into the DC schemes below the limit of £10,000. As such, an individual who falls under the £10,000 DC allowance rule will have the option of funding a DB scheme to a maximum value of between £30,000 and £40,000.