SIPP Pension contributions - 2 Directors

[northernladuk]

I am. 100% sure. Read here -

Frequently Asked Questions | Dentons Pensions

Is it possible to open a SIPP in joint names?

Answer - No, a SIPP is for an individual.

Explained nice and clearly.

Is it 40k£ for individual director and 80K in total.

SIPPs cannot be joint names. Presumably the OP knows that.

I'm not so sure about that.

[Paralytic]

It doesn't have to be from retained profit, or profit at all, as pensions are an expense.

Putting the company into a position where it cannot afford to pay its creditors is a problem but not related to pensions per se.
It's no different to office costs, postage, new laptop, salary etc.

Yes, I was talking more as recommendation rather than what is possible; obviously, there's nothing to physically stop someone transferring all their company's cash into their pension and potentially knowingly leaving the company trading as insolvent.

[Lance]

Yes, I was talking more as recommendation rather than what is possible; obviously, there's nothing to physically stop someone transferring all their company's cash into their pension and potentially knowingly leaving the company trading as insolvent.

Well. Apart from trading when insolvent is illegal.

[northernladuk]

Yes, I was talking more as recommendation rather than what is possible; obviously, there's nothing to physically stop someone transferring all their company's cash into their pension and potentially knowingly leaving the company trading as insolvent.

Why would you make a recommendation that might not be possible?? You are getting in to Sime's world there.

[Paralytic]

Well. Apart from trading when insolvent is illegal.

Are you thinking of Wrongful Trading?

Is Insolvent Trading Unlawful?

Here again, there may be a fine line between wrongful trading and insolvent trading. If the financial difficulties can be determined as temporary, or temporary in the eyes of the director, then it is probably not unlawful. Wrongful trading, on the other hand, has statutory rules and regulations and it is indeed unlawful to trade if there is no hope of recovery. This is where Real Business Rescue provide the support and advice needed during these times. There is legislation which governs wrongful trading and the penalties can be harsh.

What Is Insolvent Trading and Wrongful Trading in Business?

[Lance]

Are you thinking of Wrongful Trading?




What Is Insolvent Trading and Wrongful Trading in Business?

yeah. That.

IANAL.

Given what happens in April, the OP would be unwise to make the company insolvent. In fact it is always unwise if it's avoidable. Not that OP is suggesting this, nor do I think you are suggesting it but there are details around what you can and can't do.

[aneecha]

Hi All,
Thank you for all your replies and they answered my queries.
I meant moving 40K each to 2 different SIPPs.

BR.

[Contreras]

It doesn't have to be from retained profit, or profit at all, as pensions are an expense.

Putting the company into a position where it cannot afford to pay its creditors is a problem but not related to pensions per se.
It's no different to office costs, postage, new laptop, salary etc.

Pension contributions are different. If the total remuneration (i.e. including salary) is unusually large, HMRC can challenge it was only done for tax avoidance and so disallow it as an expense.

There used to be a page about it HMRC's manual (is that still online?), basically clarifying that it was not a problem for a single fee earner if the total remuneration was covered by profit, but otherwise could/should be referred for review.

The same could be said for carrying back the partner's contribution to make it a £120k/£40k split where the profit was earned was 50/50.

HMRC probably have more pressing things to worry about atm, though I wouldn't want to risk it without professional advice, and by that I mean not from a financial advisor working for commission and who will be long gone by the time HMRC wake up after several year's worth of contributions.