- Contributions normally qualify for full tax relief.
- Employer contributions do not attract National Insurance.
- The contributions are invested in a fund that accumulates free of UK tax on investment income and capital gains, although pension funds cannot claim the tax credits on dividends from UK shares.
- Part of the pension fund can be taken as a tax-free lump sum, and when the cash is drawn, the remainder of the fund must be used to provide a taxable income for life.
- Life assurance can be provided under pension plan rules and employer-paid premiums are usually allowable for tax.
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The current pensions tax regime
02: Basic features
Some of the key aspects of pensions did not change with the arrival of the 2006 tax regime:
The FSA does not regulate tax advice. Tax rules are subject to change.
