Salary arrangements following phase-out of self-administered pension scheme

Have you made up your mind about what to do now that your self-administered pension scheme is about to become a thing of the past? Have you gone for commutation or conversion to a retirement provision, or have you decided to let it go and hope for the best?

The first of July 2017 is the “day of reckoning” where self-administered pension schemes are concerned. It is with effect from this date that many a private limited-liability company will forfeit a substantial tax credit. Under the new regime it will not be permissible any more to credit the pension coffers at annual intervals, and although the credit interest may still be added, this will not nearly enable the same level of tax relief to be achieved. Allowances are to be made for a sizeable drop in the labour costs for directors-cum-controlling shareholders, and these would therefore do well to take a long hard look at their own employee benefits package. Should or could a pay rise be in order? Is the efficiency margin being put to good use? And has the most been made of the possibility to surrender gross salary in cash in exchange for tax-exempt expense allowances in a targeted exemption context?

We’ve said it before and we’ll say it again: don’t sell yourself short, but liaise with your financial consultant instead!

Dutch version: Salaris geregeld na de uitfasering pensioen in eigen beheer