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‘Don’t rely on sale of your business for retirement’

Rowanmoor director of consultancy David Seaton says pension simplification has been a disaster and is urging business owner/directors not to rely on the sale of their businesses for their pension.

In a speech at the Henry Stewart small self-administered scheme conference in London last week, Seaton said it would have been simpler if the Government had not changed the rules in the middle of the process.

He says: “If they had understood the issues better and not made ill-informed knee-jerk decisions, we, and I include the poor people at HM Revenue & Customs, would not have been faced with such complex legislation like tangible moveable property and unauthorised payment rules.

“My concern is that when you add in the onerous online reporting requirements, the complexity becomes so great and so expensive that many directors will give up with pensions. If they stop providing for themselves, then why should they provide for their staff? This Government may well be remembered for overseeing not only the decline of final-salary pensions but also pensions for all.”

Seaton said that too many owner-directors see their businesses as their pension, which is a dangerous sentiment.

He said: “Unforeseen market changes can render a business worthless. It is vital that some of the profits are transferred tax-efficiently to anSsas. Outside the company and creditor-free, the funds canbe used to assist the business.”

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