Company contributions to non-employee pension?

**FarmerPalmer** · 17 April 2009, 09:07

Could your company offer to pay your wife a salary for admin tasks,
but she puts in writing a waiver, asking you to put all her salary into a pension

**sage@reillymcmordie** · 17 April 2009, 09:47

Originally posted by dapster105 View Post

Hi all,
I'm new to this accounts lark and I'm just exploring options available to me to help reduce my corporation tax bill at the end of the year.
I understand that my company can make gross contributions into my stakeholder pension scheme.
What I'm wondering is if the company can make payments into /any/ stakeholder scheme. For example, my wife is company sec. but not an employee as she has a 'proper' job elsewhere. Could MeLtd contribute to her pension?
Better still, could it contribute to a stakeholder pension for my 1yr old?

The total size of pension payment is not in question - if my pension is the only option, then that's where it's going - so can't I just ask the company to direct the payment slightly differently.

I actually asked the Pensions Regulator and they 'couldn't see why not', but they're hardly HMRC so I'm looking for either some confident, knowledgable reassurance or a swift smack on the bottom for thinking such naughty thoughts.

Thanks!

For a company to claim corporation tax relief, the expense must be incurred "wholly and exclusively" for the trade. It can be argued that contributions to your plan are part of your renumeration package and relief is available. Unless wife/son do some work for the company, the contributions would fail the "wholly and exclusively" test.

**dapster105** · 17 April 2009, 10:11

Thanks for your thoughts.

WRT the "wholly and exclusively", could I not make a formal agreement between myself and the company that the company would contribute £x pension payment into pension plans to be determined by me.

In that case the payment is wholly and exclusively for the purposes of trade (to reward my extra-ordinary efforts), I'm simply directing the pension contributions in several directions, one of which is my son's?

[Stands produly, straw in hand]

**ASB** · 17 April 2009, 10:31

Don't forget, you personally can put up to the de minimus limite (3600??) into anybodys pension and relief wil e granted even if they don't have the income. Might help, might not.

**sage@reillymcmordie** · 20 April 2009, 13:50

Originally posted by dapster105 View Post

Thanks for your thoughts.

WRT the "wholly and exclusively", could I not make a formal agreement between myself and the company that the company would contribute £x pension payment into pension plans to be determined by me.

In that case the payment is wholly and exclusively for the purposes of trade (to reward my extra-ordinary efforts), I'm simply directing the pension contributions in several directions, one of which is my son's?

[Stands produly, straw in hand]

Sadly not! To enter into an agreement with the company is different from specifying the "trade". You could obtain personal tax relief by paying into a
personal pension up to £3600 p.a. for any person in the UK.

**Little'Old Me** · 20 April 2009, 17:07

You pay it out of your income (into a scheme in your sons name) and then the scheme reclaims the tax relief from HMRC and tops up your contribution.

so you pay £2,880pa
HMRC tax rebate to the scheme £720pa

Contributions into sons pension £3,600

So to receive £3,600 - you only pay £2,880

Company contributions to non-employee pension?