Latest News

‘Cashless’ pension contributions

If you have invested much of your wealth into assets such as stocks and shares or perhaps a commercial property, you may find that making a cash contribution to a pension scheme is a stretch. To get around this potential cash flow issue, you have the option of making ‘in specie’ contributions, using assets in place of cash.

Assets such as stocks and shares and commercial property can be used to make a pension contribution and will enjoy the same level of tax relief as making ordinary cash contributions.

There are inevitably some limitations imposed by HMRC, so assets such as your favourite classic car, yacht, holiday home, vintage wine or work of art cannot be held by a pension plan as an investment.

The transfer of value must be done on a ‘commercial basis’ so the pension plan cannot take on board an asset at either an inflated cost or at a discounted price.

Any transfer of assets will still count towards the Annual Allowance that we all have for making pension contributions in any one year.

The transfer of any asset is considered by HMRC as a ‘disposal’ , which may have tax-related implications.  You are therefore strongly recommended to take specialist tax planning advice on this matter.

PK Group can offer a consultation to discuss whether or not this approach could work for you and to ensure that you maximise the effectiveness of your pension investments and tax planning.  If you would like to find out more about ‘cashless pension contributions, then please call one of PK Group’s advisors today.