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3.2 Tax Concessions
- Occupational Pension Schemes attract substantial tax concessions:-
- Tax relief on any contribution made by the scheme member is allowable
against income tax (at highest rate paid), subject to a limit of
15% of remuneration.
- Contributions made by the employer are allowable as a trading
expense.
- Employer contributions are not treated as a benefit in kind to
the employee for income tax purposes.
- The pension fund is free from taxation on its capital gains, but
it is no longer able to reclaim tax deducted from UK dividends (July
1997)
- Part of the fund accumulated at retirement may be available as
a tax free cash sum.
- Death benefits may be provided for dependants, free of inheritance
tax.
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