OK, I'm much clearer now I've spoken to the accountant, and I'm confident it will sink in with time. Minerva, we actually have Account based pensions. Thanks especially for your point on that aspect. Other people may benefit.
Here are the notes I made. I believe the gist is correct and that our example may be applicable to others. ```````````````````````````````` We want to reduce tax to the fund and also reduce tax to beneficiaries. The fund consists of 2 parts which are the Accumulation part and the Pension assets part. Earnings on the Accumulation part are taxable @ 15% so we want to get them out and into the Pension assets asap as once there, they are non taxable to the fund. On death of both fund members, part of the fund will be highly taxed to beneficiaries. We want to reduce that part. Therefore, take a lump sum of $140K (ie on the safe side of the $150K limit)from the SF to personal bank a/c. Re-contribute it (it will go into the Accumulation part), then immediately start a pension from it so it becomes part on the Pension assets and therefore non-taxable to the fund. Not only that, because it came from a personal after-tax contribution, it will be a non-taxable portion to beneficiaries. Repeat annually for as long as necessary to zero the portion taxable to a beneficiary.
Moreover, portions of the four Pensions we are currently running will be taxable to beneficiaries. In particular, of Pension 1 for myself, 89.84% would be taxed at 16.5% to beneficiaries, so we should draw from Pension 1 to dwindle away the taxable portions (eg if we buy a car). ~ 30% of Pens 1 for my wife would be taxed to beneficiaries, but all the other pensions for her are 100% tax free. ~ 56% of Pens 3 for me would be tax free.
The accountant will do the pensions calculations and handle the “dwindling”. He's also balancing 50:50 between my wife and self.
