Pension Taper Trouble

High-Earning Director Tackles Pension Taper with VCTs & Carry Forward

A 45-year-old company director, was frustrated. Despite strong company profits, his tapered pension allowance restricted him to just £10,000 a year—a drop in the ocean for his retirement goals.

Working with Caldwell Financial, we reviewed his unused pension carry forward allowances, unlocking an additional £110,000 of pension contributions—fully deductible against corporation tax.

To go further, he also invested £100,000 into a Venture Capital Trust (VCT), securing an immediate £30,000 income tax rebate, all while keeping future dividends tax-free.

Together, these strategies:

• Reduced his corporation and income tax bills

• Diversified his personal wealth outside the business

• Built a long-term, tax-efficient retirement plan

“I’ve finally got a strategy that rewards success—without being penalised for earning more.”

Venture Capital Trusts (VCT) invest in assets that are high risk and can be difficult to sell, such as shares in unlisted companies. The value of the investment and the income from it can fall as well as rise and investors may not get back what they originally invested, even taking into account the tax benefits.

This is for illustrative purposes only and does not constitute advice.