take pension yearly and still contribute via ltd?

[slogger]

have googled this and cant see anything exactly the same -- basically I'm just over 55 years old, still contracting via ltd company and outside ir35.
not hit maximum pension contributions but dont need to increase pension pot.

so for minimising tax can I:
get my ltd company to pay 40k pa into sipp
keep remainder in company till I retire in next couple of years - then close company down and take as capital gains/entrepeneurs allowance

question bit - can i then take 40k pa out of pension each year as I'm paying into it - this would be 10k tax free, 12k personal allowance and no NI as its pension income - ie a lot less tax than paying dividends

have emailed accountant but wanted to see if anyone else has looked into doing this?

[ fyi as ltd company and I'm director I dont need to pay a salary - may do minimum to up my state pension though ]

[northernladuk]

If you've had your pension plan open you can carry forward unused allowances for the last three years (I think) to help get more in. Don't know the exact numbers but you can carry forward allowances which might change your plan as well.

[Fred Bloggs]

have googled this and cant see anything exactly the same -- basically I'm just over 55 years old, still contracting via ltd company and outside ir35.
not hit maximum pension contributions but dont need to increase pension pot.

so for minimising tax can I:
get my ltd company to pay 40k pa into sipp
keep remainder in company till I retire in next couple of years - then close company down and take as capital gains/entrepeneurs allowance

question bit - can i then take 40k pa out of pension each year as I'm paying into it - this would be 10k tax free, 12k personal allowance and no NI as its pension income - ie a lot less tax than paying dividends

have emailed accountant but wanted to see if anyone else has looked into doing this?

[ fyi as ltd company and I'm director I dont need to pay a salary - may do minimum to up my state pension though ]

It sounds to me like the answer is "no you can't". You need to look up and understand the "Money Purchase Annual Allowance" that is triggered when you drawdown from a defined contribution pension plan.

In a nutshell, if you draw even 1p more than the 25% pension commencement lump sum, the MPAA is triggered and that restricts any new pension contributions from that point on.

[slogger]

Thats if pension is in draw down.. i wont be taking an income, but cashing in the 40k pa i pay in..(subtle difference i know)

[Fred Bloggs]

Thats if pension is in draw down.. i wont be taking an income, but cashing in the 40k pa i pay in..(subtle difference i know)

Then your concern is the pension recycling rules. The answer therefore remains, "no you can't". I think you are trying to be a bit too clever here.

[slogger]

My sipp provider said this wont apply as I've been consistently paying 40k pa into the sipp..apparently the contributions have to increase due to pcls to be caught by this.

[Fred Bloggs]

My sipp provider said this wont apply as I've been consistently paying 40k pa into the sipp..apparently the contributions have to increase due to pcls to be caught by this.

Happy days then.

[mackenzie99d]

As soon as you withdraw anything over your 25% tax free allowance this is seen as a crystallising event and you are then withdrawing from your pension.
From that moment on the maximum you can then pay into your pension per year is £3600.

[Fred Bloggs]

As soon as you withdraw anything over your 25% tax free allowance this is seen as a crystallising event and you are then withdrawing from your pension.
From that moment on the maximum you can then pay into your pension per year is £3600.

OP says he/she isn't doing so.

[Paralytic]

For those that want more details on recycling rules, i've found this paper quite informative

https://www.hl.co.uk/__data/assets/p..._Factsheet.pdf