Pension or what?

[pacharan]

I have a small sum that I was going to invest in my pension before year end.

Only 15-20k but the recent negative press that pensions have been receiving has made me wonder if this is the way to go.

Problem is, if I put towards a BTL, I automatically pay 40% on it as I'm right on the higher band.

This also means HMRC'll be wanting payments on account next year. Something I could do without.

Also of course, pension payments are IR35 proof (because they're a legitimate business expense). If I invest the money in a BTL and I'm unfortunate enough to get investigated and lose then I won't be able to pay up.

[jmo21]

Zopa or Funding Circle?

Buy some gold?

Facebook shares

[DimPrawn]

pacharan is a shower of tulip

Just noticed that.



WTGALS

If it were me, diversify. Why not put it in an ISA and what's left over buy some gold coins.

I recommned Buy 1oz Gold Britannia coins from BullionByPost UK

There is no CGT on these coins and if they don't go up in value (trust me with QE they will) you can give them to your grandchildren as keepsakes.

[northernladuk]

Pensions are not to be totally avoided, good to have one as part of a spread portfolio.

Is this money in your LTD or in your pocket and has been taxed? If it is in your company you save the tax on it which isn't to be sniffed at.

[DimPrawn]

If it's going to be a pension, at least do a SIPP so you have some control on the costs/fees and how the money is "invested".

[Nixon Williams]

I have a small sum that I was going to invest in my pension before year end.

Only 15-20k but the recent negative press that pensions have been receiving has made me wonder if this is the way to go.

Problem is, if I put towards a BTL, I automatically pay 40% on it as I'm right on the higher band.

This also means HMRC'll be wanting payments on account next year. Something I could do without.

You could consider property investments through a limited company, this way the earnings are protected from personal taxation until they are withdrawn.

Rental income in a company will usually be taxed at the small companies rate (currently 20%). This seems to be attractive when set against a potential 50% rate for an individual. If rents are significant this may be an option to consider although there are additional compliance problems to deal with, not least
Companies Act requirements.

From a tax viewpoint it must be remembered that income
has to be extracted from a company by an individual generally either as salary or dividend and that this may trigger a tax liability. It is also important to remember that when a property is sold by a company any gain is generally only reduced by an inflation allowance.

Other reliefs are generally not available. The gain (after Corpoartion Tax) then has to be extracted from the company at a further additional cost.

Alan

[Support Monkey]

Pensions are not to be totally avoided, good to have one as part of a spread portfolio.
Is this money in your LTD or in your pocket and has been taxed? If it is in your company you save the tax on it which isn't to be sniffed at.

Its true try and spread it around a bit, BTL Pensions, ISA for pensions do it yourself through Hargreaves lansdown at least then the ball is your court as to what your investing in

[DimPrawn]

You could consider property investments through a limited company, this way the earnings are protected from personal taxation until they are withdrawn.

Rental income in a company will usually be taxed at the small companies rate (currently 20%). This seems to be attractive when set against a potential 50% rate for an individual. If rents are significant this may be an option to consider although there are additional compliance problems to deal with, not least
Companies Act requirements.

From a tax viewpoint it must be remembered that income
has to be extracted from a company by an individual generally either as salary or dividend and that this may trigger a tax liability. It is also important to remember that when a property is sold by a company any gain is generally only reduced by an inflation allowance.

Other reliefs are generally not available. The gain (after Corpoartion Tax) then has to be extracted from the company at a further additional cost.

Alan

Sounds like a good choice if you are buying property outright (no mortgage) and doing it for the rental yield rather than leveraged capital gain.

If you've only got £20K you aren't going to get very far in BTL without a mortgage, and then the interest will swallow most of the rent anyway.

[pacharan]

Pensions are not to be totally avoided, good to have one as part of a spread portfolio.

Is this money in your LTD or in your pocket and has been taxed? If it is in your company you save the tax on it which isn't to be sniffed at.

In the Limited.

I also have a few grand in pocket which I shall stick in a cash ISA and keep it there for the 6 or 7 years it'll take until this current contract is off the taxman's radar.

[pacharan]

Its true try and spread it around a bit, BTL Pensions, ISA for pensions do it yourself through Hargreaves lansdown at least then the ball is your court as to what your investing in

An outfit called Wealth Matters handles my pension (recommended by the PCG). I don't really have much input.