Self-administered pension

A self-administered scheme is geared towards the owner or director of a limited company.

A self-administered pension scheme allows the beneficiary of the pension to take complete control of his/her pension investment decisions. The difference with a self-administered scheme is that a pension provider such as an insurance company is not used for the provision of the pension structure.

Tax Relief:

For a company which is cash rich, a distribution to directors in dividends or in directors fees will usually incur personal tax liabilities for each of the directors. The only way to permanently transfer generated cash from the business to the business owners, without raising tax liabilities for the directors, is to make pension contributions on behalf of each of the directors.

In addition, the transfer of funds from the company to the pension scheme is treated as a business expense for the business, lowering taxable business profits. This contrasts to a distribution through dividends which is not treated as a business expense and comes from after tax profits.