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4.2 Retirement Annuities Pre-1988
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At one time Retirement Annuity Contracts (RACs) were the means
by which the self employed, those in non-pensionable employment
and controlling directors provided for their retirement.
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The legislation governing RACs originated in ss 23/24 of the 1956
Finance Act. They later became subject to the provisions of ss226-229
of the Taxes Act 1970, and currently ss 618-629 of the Income and
Corporation Taxes Act 1988. Retirement annuities have not been available
since 30th June 1988, but further contributions may be made to existing
contracts, which may have a knock on effect on subsequent personal
pension contributions.
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They cannot be used for contracting out purposes.
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See also Contribution Limits and Tax Relief for contribution maxima. Note however that no
employer contributions are allowed
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