Nava-35sdf
New Member
- Messages
- 5
Hi folks,
Firstly, Brendan (if you see this), thank you! At the start of 2023 I asked for help with figuring out the best way to handle a financial situation that was giving me many sleepless nights.
You replied in detail and the information was considerably more helpful than the advice given by my own financial advisor.
The result was that I was able to set a clear financial goal that I was confident in and have since achieved. Cheers!
My 2024 question (if you have time): Quick overview of my situation:
- 35. Sole owner of LTD company in high risk industry (I've been saying 'this could be our last year for the last 2')
- I have spent the last 12 months paying myself as much as possible to build up a lump that'll help us buy a house with a manageable mortgage
- Now have a reasonably large cash lump
- Have an emergency fund in case business goes south to cover 8 months expenses
- Have 110k in an executive pension
- Not married. With long term partner. No kids.
- My financial advisor tells me that, based on past service, I can get around 200k into my pension
The question(s): How best to take money out going forward
I have read the Key Posts around this and I am still at odds as what to do. Here are the scenarios I have in my head:
Scenario 1: Pension + Entrepreneurial Relief
As the business is in such a high risk area, it's highly possible we could cease trading in 1-2 years.
I may be misunderstanding the Entrepreneurial Relief but, let's say I left the profits in the business and allowed them to build.
If the business went under and I closed/disposed of it, would I personally pay 10% on the gains? (the gains minus the 12.5% on profits).
If that's the case, then it might make sense to go this route (I could be completely misunderstanding this).
If this was feasible, I could pay into the exec pension at the same time.
Scenario 2: Go heavy on the pension
I had always planned on paying myself and then making personal investments, but I'm not sure what I'd be investing for.
In my head, it'd make more sense to pay myself a modest salary while working at getting the 200k back payment into my pension.
The advantages of this, as I see them, are the tax benefits of the exec pension and the fact that, if needed, I could access it from 50 (obviously cons to this).
The disadvantages are not being able to access the money.
Thanks for taking the time to read this. If anyone reading has time to offer any feedback, it'd be greatly appreciated!
Cheers.
Firstly, Brendan (if you see this), thank you! At the start of 2023 I asked for help with figuring out the best way to handle a financial situation that was giving me many sleepless nights.
You replied in detail and the information was considerably more helpful than the advice given by my own financial advisor.
The result was that I was able to set a clear financial goal that I was confident in and have since achieved. Cheers!
My 2024 question (if you have time): Quick overview of my situation:
- 35. Sole owner of LTD company in high risk industry (I've been saying 'this could be our last year for the last 2')
- I have spent the last 12 months paying myself as much as possible to build up a lump that'll help us buy a house with a manageable mortgage
- Now have a reasonably large cash lump
- Have an emergency fund in case business goes south to cover 8 months expenses
- Have 110k in an executive pension
- Not married. With long term partner. No kids.
- My financial advisor tells me that, based on past service, I can get around 200k into my pension
The question(s): How best to take money out going forward
I have read the Key Posts around this and I am still at odds as what to do. Here are the scenarios I have in my head:
Scenario 1: Pension + Entrepreneurial Relief
As the business is in such a high risk area, it's highly possible we could cease trading in 1-2 years.
I may be misunderstanding the Entrepreneurial Relief but, let's say I left the profits in the business and allowed them to build.
If the business went under and I closed/disposed of it, would I personally pay 10% on the gains? (the gains minus the 12.5% on profits).
If that's the case, then it might make sense to go this route (I could be completely misunderstanding this).
If this was feasible, I could pay into the exec pension at the same time.
Scenario 2: Go heavy on the pension
I had always planned on paying myself and then making personal investments, but I'm not sure what I'd be investing for.
In my head, it'd make more sense to pay myself a modest salary while working at getting the 200k back payment into my pension.
The advantages of this, as I see them, are the tax benefits of the exec pension and the fact that, if needed, I could access it from 50 (obviously cons to this).
The disadvantages are not being able to access the money.
Thanks for taking the time to read this. If anyone reading has time to offer any feedback, it'd be greatly appreciated!
Cheers.