Over 55? How to yearly get £15,000 tax free from your pension with a Limited Company. Illustrated

If you're over retirement age, which is currently 55, how can you get £15,000 a year out of your pension if you own a limited company? 

Let’s take a look.

How to Get £15,000 Tax Free from Your Pension

The best way for us to answer this question is to show an example of how we achieved this very thing for one of our clients. To keep things simple, here are the highlights: 

• Our client is the Director of a Limited Company
• He is taking dividends from his Company on top of receiving his state pension. 
• That arrangement upped his personal allowance, increasing his taxable income.
• We suggested stopping the annual £60,000 dividend payments as the income tax was costing him a lot.
• Instead, he paid £60,000 from his Company into his SSAS, saving £15,000 (25%) in corporation tax as a result.
• The client only needed £15,000 from his SSAS each year to pay for his holidays. So, we suggested he take the 25% tax free cash. This would give him £15,000 tax free cash this year.
• If he wants to do the same again next year, he can rinse and repeat. 

Using the method above, we’ve put £60,000 into the SSAS and withdrawn £15,000. That leaves the client with a net value of £45,000 in the pension scheme that can now be invested through our sister Company, One Crown Investments.

Speak to the One Crown Pensions Team

If you are reaching retirement age and considering how to withdraw money from your SSAS tax-efficiently, we’d love to hear from you. Book a call to speak with a member of our One Crown Pensions SSAS provider team. We’re here to support you in securing your retirement.

For more information about SSAS pensions and what they can do for you, visit our SSAS Video Hub.