Tax AdvantagesSIPPs are registered pension schemes, which are established under trust. This means that they enjoy significant tax advantages. Tax advantages on money going in: - Employer contributions to the scheme, which are wholly and exclusively for the purposes of the business, and which do not exceed the annual allowance are tax deductible.
- Personal contributions to the scheme, which do not exceed both 100% of earnings and the annual allowance are income tax free.
Tax advantages on assets held within the SIPP: - There is no capital gains tax due when assets are sold
- There is no income tax on income derived from investments (eg rent and loan interest)
- There is 10% tax on dividend income.
Tax advantages on money coming out of the fund: - A tax free lump sum of up to 25% of the member's fund can be paid on retirement
- Lump sum payments in the event of the death of member before age 75 are Inheritance Tax free.
|