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The earnings cap

A number of directors will have a keen interest in reducing both corporation tax (and also employer&#39s National Insurance) and personal levels of income tax. In particular, a number may enjoy a high level of earnings in excess of the earnings cap which has been increased to £99,000 for tax year 2003/2004.

Where such directors are unable to pension their earnings over the cap by means of an approved occupational scheme (as they are neither pre 87 nor 87-89 regime members) they should give serious thought to the establishment/use of a Funded Unapproved Retirement Benefits Scheme (FURBS) to pension these. While this latter arrangement offers no special corporation tax, NIC or income tax benefits at outset (the contributions, usually being deductible as a business expense, but assessable to income tax on the director and, within the normal limits, subject to NIC) they can offer

  • an income tax and capital gains tax reduced home for investments
  • IHT free payment to dependants on death of a member before taking benefits


  • benefits payable wholly in cash

There is at present some confusion how FURBS benefits will be treated under the new simplified pensions tax regime. Clarification is expected on this in the Revenue&#39s further consultation paper which is due to be issued in late summer/early autumn. It may be prudent to leave any FURBS contribution until after then when their tax position under the new regime has been set out.


Gilchrist to retire after 35 years at ScotLife

Scottish Life sales director Jim Gilchrist is retiring on July 1 after 35 years with the life office and will be succeeded by deputy sales director Jim Smith.Gilchrist, who joined Scottish Life in 1968 as a Glasgow branch manager, has held overall responsibility for sales since 1988.It had been rumoured that Gilchrist would retire following […]

Equitable shows signs of life

One of the great ironies of the market turbulence is that Equitable Life is now outperforming other life funds following its switch out of equities and into bonds at the beginning of 2002.Chairman Vanni Treves, says Equitable is stabilising and out of intensive care although it still has some way to go.Equitable says it has […]

Stamp duty

This Budget confirms the details of and changes to the modernised regime for stamp duty (now also, in some of the Budget Notes referred to as &#34stamp taxes&#34) which were first announced in the Budget 2002. Most of these come under the heading &#34Modernising the Taxation of Property&#34. The new regime will apply from 1 […]

Push whacked

Amid all the doom and gloom hanging over the financial services sector, there are glimmers of encouragement.Most of the low-cost endowments on our books are those in existence prior to our involvement with the clients in question although we receive copies of the various updates and reprojections issued by the life companies. As we all […]


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