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3.2 Tax Concessions

  • Occupational Pension Schemes attract substantial tax concessions:-

    1. 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.
    2. Contributions made by the employer are allowable as a trading expense.
    3. Employer contributions are not treated as a benefit in kind to the employee for income tax purposes.
    4. 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)
    5. Part of the fund accumulated at retirement may be available as a tax free cash sum.
    6. Death benefits may be provided for dependants, free of inheritance tax.

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