View more on these topics

IFAs voice SSAS fears after court rules on executive&#39s tax-free cash

IFAs are warning that a court ruling that an executive director is not allowed to retire and take a tax-free lump sum if he remains a non-executive director in the firm could have serious ramifications for the small self-administered scheme sector.

The Court of Appeal overturned an earlier High Court decision in the case of Vena-bles •Hornby, ruling that Venables, who was an executive director and major shareholder, had not retired within his company&#39s pension scheme and was therefore not entitled to claim the tax-free cash.

The decision could see the Inland Revenue chasing other non-executive directors for tax on their lump-sum payments where they retain an interest in the running of the company.

The court decision will hit small businesspeople selling their business or passing it on to family members and is predicted to result in an increase in the demand to convert a SSAS into a Sipp at the point of retirement.

James Hay director of consultancy and former chairman of the Association of Pension Trustees David Sea-ton says: “This is a very nasty attack on pensions by the Inland Revenue.

“Advisers could be facing claims against them if they have not told their client that they must sever all relations with the company to receive tax-free cash.”

Marsh Williams Trustees managing director Ian Williams says “This ruling could hit the SSAS market as it will hit controlling directors in their ability to pull out of the business in an efficient way and still keep a hand on the tiller.

“Small businesses are the backbone of the economy and a lot of people rely on being able to sell their business to be able to retire.”

Recommended

The relevance graveyard

Increasingly, individuals with occupational pensions are transferring to personal pensions to take advantage of the flexibility available with future funding and drawdown.There is quite often a need to take benefits from a pension plan, particularly tax-free cash, without wishing to retire. A personal pension is the only vehicle that will allow this flexibility.But tax-free cash […]

Health care providers merge

Health care providers HSA and Simplyhealth have announced they are to merge after receiving FSA approval.HSA is one of the UK&#39s largest cash plan providers while Hertford based Simplyhealth is a non-profit friendly society. Both companies will continue to operate separately.HSA chief executive Des Benjamin says: “We are delighted that the merger has now been […]

London property falls as Northern prices rise

London house prices fell in September while Northern regions saw strong rises.Market analysts Hometrack says the average price in central London fell by 0.2 per cent in September to £441,350 from £442,251 in August.Its monthly survey of the housing market in England and Wales shows that overall price growth was 0.6 per cent, with the […]

Misys seeks damages for &#39forged documents&#39

Misys is seeking damages for what it claims were two forged documents which it alleges were sent by former DBS member Evan Owen, according to official High Court papers obtained by Money Marketing.Last week, Money Marketing reported that Misys had taken out an injunction against Owen.In the court papers, Misys claims a fake press release […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment