Pension planning for owner-managed businesses

Produced by Tolley in association with Ros Martin

Owner-Managed Businesses

Guidance

This guidance note considers the role pensions can play in tax planning for sole traders, partnerships and owner-managed companies. It addresses pension contributions from the perspective of the individual and from that of the business. In an owner-managed business context, personal, family and business issues have a part to play and interaction with levels of other income, child benefit claims, transitional profits arising from basis period reform and close company national insurance are relevant. The types of pension scheme best suited to OMBs are considered.

See also the Pension contributions by owner managed companies guidance note.

Pensions and the family business

The payment of pension contributions by family businesses is an area of tax planning which is often overlooked. Below, we will consider some planning possibilities for the proprietors of owner-managed businesses, considering both unincorporated and incorporated businesses.

Sole trader and partnership pension options

When we are talking about unincorporated businesses, there is no real concept of the business making the contribution on behalf of the owner, as these are always treated as personal

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