Feb 28 2007
Investors receiving end-of-year bonuses should put these sums into their self invested personal pensions (Sipps) in order to make the most of this money, it has been claimed.
The pensions division of Charles Stanley, EBS Management, reports investors can efficiently use tax reliefs to convert a £129,000 bonus into a pension fund of up to £215,000.
Kate Ragnauth, director of EBS Management, commented that changes to regulations mean that investors cannot carry back their tax relief entitlement from one year to another.
"However, HM Revenue & Customs does allow you to invest on the basis of estimated earnings, so even if you do not have completely accurate figures before the new tax year ends you do not have to wait until you do," she said.
She added that any errors made in estimation can be corrected in the following financial year.
Last August, FundsNetwork reported on a 100 per cent increase in sales of Sipps following changes to pension regulation with the implementation of A-Day regulation in April 2006.
