Butitdoesn’tendthere。

Ifhe’sover55,hecanalsotake25%ofhispensionpotoutinatax-freelumpsum。

Thatwouldmeanimmediatelywithdrawing£3,737,leavingapensioncontributionof£11,213behind。

Addthe£3,737tothetaxsavingsmadeandthenetresultisthatthesaverinquestionhaspaidamere£2,243forthe£11,213ofpension。

Verysatisfying。

Anyoneearningupto£150,000canusethistricktogettheirpersonalallowanceback(assumingthey’repreparedtolockmostofthemoneyintoapension)。

Itwon’tworkforthoseonmorethan£150,000becausepensioncontributionsarenowcappedat£50,000ayear。

Buthighearnerscanearnbetween£150,000and£200,000andavoidthe50%taxrateshouldtheywantto。

Earn£180,000andput£30,000intoapensionandyouwon’tbebotheredbythe50%rateatall–unlessyourincomeisstillover£150,000whenyouretire。

Forover-55sonveryhighincomes,thereisstillsomethingclevertodo。

Let’ssayyoupay£50,000toyourpensionatage55whenyouarestillearning£200,000。

Addbackthetaxreliefandyournetcostis£25,000。

Thentakeout25%(£12,500)。

Thenetcostofthecontributionisnow£12,500,butyouhaveanextra£37,500inyourpension。

Alsosatisfying。

Still,don’tthinktheLibDemshaven’tnoticedtheseloopholes。

Ifyouwanttousethem,doitsoon。

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