In Specie Property Purchase
Asset Rich, Cash Poor is a phrase we often hear in relation to SME businesses ...but there are still various opportunities for pension planning for such firms as this article outlines.
There has been much press coverage surrounding the forthcoming “Pension Flexibility” measures recently announced by George Osborne and which are due to be implemented from April 2015. Of course, such flexibility can only be taken advantage of if members have accrued pension savings prior to having the need to draw upon them. We often come across situations where firms are relatively asset rich but either do not have the cash flow to fund a pension contribution, or have this cash flow earmarked for other projects. Of course, pension contributions do not necessarily need to be made in cash form. An in-specie contribution is where, rather than making a cash contribution, this is “paid” via the transfer of assets such as property or shares owned by the firm.