Pension rules are continually changing and this is our current understanding of the rules that apply at the present time.

Contributions

• Contributions since 6 April 2011 are now limited to a maximum annual contribution of 100% of relevant earnings or £50,000 whichever is less (includes employer contributions).
• If you have no earnings you may still contribute up to £3,600 p.a. (£2,880.00 net).
• Additionally, if you were a member of a pension scheme for the previous three years you may contribute the maximum for each year less any contributions made by yourself or your employer and subjct to the maximum of £50,000 for each year.
• Tax relief will be available for personal contributions within the above limits.
• Employer contributions must pass the "wholly and exclusively for trade" test before they can be offset against corporation tax and this is at the discretion of the local inspector of taxes.
• "In Specie" contributions will be considered where the value of the asset can be clearly identified and there is a strict procedure for this type of contribution or transfer.
• Combined contributions of both employee and employer that exceed the annual allowance of £50,000 gross will be subject to a 40% tax charge.

Lifetime Allowance

• There is a limit on the overall value of your pension schemes (all schemes) that you may accumulate without incurring a tax charge.
• Until 5 April 2012 this is set at £1,800,000 but reduces from 6 April 2012 to £1,500,000.
• Pension funds that exceed this amount will be taxed on the excess.

Protection

• If all your pension funds combined are likely to exceed £1,500,000 in value then you should elect to receive "Fixed Protection" and make no further contributions after 5 April 2012.

• Previous protection for Enhanced or Primary protection will still continue.

Retirement Age

• The minimum retirement age since 6 April 2011 is now 55.
• Pensions may be taken early in the event of serious ill health.
• Certain professions may have protected early retirement ages.

Investments

• UK quoted stocks, shares, gilts and debentures
• Shares quoted on the Alternative Investment Market (AIM)
• Stocks and shares traded on a recognised overseas stock exchange
• Futures and options relating to shares quoted on a recognised stock exchange
• Hedge funds.
• Unit Trust, OEIC's and Investment Trusts
• Insurance Company Funds
• Bank and Building Society accounts
• Commercial Property and Land
• Gold
• Unquoted Shares - subject to further due diligence

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