Pension in lieu of bonus

[viztopia]

I am due a bonus at work (limited company) and i am considering taking it in the form of a pension contribution. I am wondering has anyone come accross this before and will there be any tax implications of me taking the bonus as a pension contribution?

 

[LDFerguson]

Are you a shareholding director of the company? If not, there might be an advantage to you in arranging that your bonus is paid through salary but then deducted immediately from your wages and paid over to the scheme as an Additional Voluntary Contribution (AVC). AVCs offer more options at retirement than ordinary scheme contributions for non-directors.

Assuming that the total amount of your own contributions to the scheme including this once-off AVC don't exceed your age-related limits for tax relief, there should be no tax implications for you.

(I'm assuming in the absence of information to the contrary that there is an Occupational Pension Scheme [not a group of PRSAs] in your place of work and that you are already a member.)

Liam D. Ferguson