Once again it is February and we are sure you do not need much reminding that it is the last chance tax payers have to easily and conveniently save tax by contributing to a retirement annuity policy or to top up contributions to an existing retirement annuity with a once off payment.
Tax relief is generous. Up to 40% of contributions can be saved in tax on 15% of taxable income. The latter includes adhoc income such as annual bonuses and investment income or even pension income too as there is no longer an age restriction for membership of an retirement annuity. It used to be 70 but this has now been removed.
Just to highlight once again their considerable benefits, retirement annuities are excellent investments in themselves. The funds pay no tax whatsoever on their investment income. Neither do they pay Capital Gains Tax on realised profits within the funds. These considerable tax advantages are of course passed on to investors. The latter gain a further advantage in that there is no estate duty on retirement annuity proceeds. Furthermore, in the event of death, benefits can be made payable to nominated beneficiaries immediately without having to go through the estate process.
Please contact your Maximus Wealth adviser for an assessment of how much tax you can save for this tax year. Needless to say, it is important that this is finalised in good time before the end of February.