Fixed protection – don’t miss out

Fixed protection – don’t miss out

Did you know there are only 35 working days until fixed protection 2014 applications close.

With just under 2 months until the Lifetime Allowance (LTA) is cut to £1.25m on 5th April, time is running out to discuss, plan and implement a solution for those approaching, or who are at this level of pension funding already. Not reviewing your pension could result in an unwelcome tax charge of up to 55% on pension benefits in excess of the Life Time Allowance when you decide to take benefits.

To avoid this charge, this may involve an application for Fixed Protection, which needs to be received by HMRC by 5th April 2014, and/or recommendations to switch pension funding to other suitable alternative tax wrappers such as ISAs and/or offshore bonds.

HMRC have given strong indications that the LTA will not be increasing again in the near future. Therefore, with better than ever “Wrap technology” we can work around the Life Time Allowance as well as the “Annual Pension Allowance”, the latter being another restriction applied to the amount you can contribute to a pension, and which is also being cut from 6th April from £50k to £40k. This poses another question, have you utilised the following allowances for the current tax year?

· Pension Contribution Allowance; £50k (up to 100% of relevant earnings)

· ISA Allowance £11,520

If you are one of our existing Private Clients/ Wrap Clients, contributing to your pension need not be time consuming or difficult. A cheque or a BACS payment coupled with an email to Elias (elias@cedarhfs.co.uk) at the office would suffice. If you have not yet sampled the advantages of the Cedar House “Wrap technology”, then this is a good time to look at its benefits and functionality.

If you are interested in making a contribution or joining our Private Client/ Wrap proposition then please contact me now at richard.kafton@cedarhfs.co.uk

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