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  • FIRST POST
    • rainbow143
    • By rainbow143 16th Apr 15, 10:06 AM
    • 43Posts
    • 6Thanks
    rainbow143
    Emergency tax code for pension lump sum
    • #1
    • 16th Apr 15, 10:06 AM
    Emergency tax code for pension lump sum 16th Apr 15 at 10:06 AM
    Hi there,
    I'm due to take my pension as a whole lump sum. I'll get the first 25% tax free then should pay 20% on the rest.
    The literature I've had from Reassure (and have read in the papers) states that the 75% will be taxed on the emergency tax code and I'll have to wait until the end of the financial year to claim it back.

    Is there any way to avoid this? I have also read that the HMRC have promised to refund the tax within a month - but is there any way I can avoid it being taken in the first place?
    Many thanks for any information.
Page 1
    • dunstonh
    • By dunstonh 16th Apr 15, 10:18 AM
    • 85,148 Posts
    • 50,158 Thanks
    dunstonh
    • #2
    • 16th Apr 15, 10:18 AM
    • #2
    • 16th Apr 15, 10:18 AM
    Is there any way to avoid this?
    If you supply them with your P45 from leaving employment they can use that (although with it being tax year change over month, it probably wont help)

    You can also fill out P50 or P53 (depending on which one applies to you).

    is there any way I can avoid it being taken in the first place?
    No. It is treated as month one earnings and will be taxed as if the figure is 12 times that amount.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • jem16
    • By jem16 16th Apr 15, 10:31 AM
    • 18,497 Posts
    • 11,293 Thanks
    jem16
    • #3
    • 16th Apr 15, 10:31 AM
    • #3
    • 16th Apr 15, 10:31 AM
    The literature I've had from Reassure (and have read in the papers) states that the 75% will be taxed on the emergency tax code and I'll have to wait until the end of the financial year to claim it back.
    Originally posted by rainbow143
    You won't have to wait until the end of the tax year as HMRC has now issued new guidelines and forms P50Z, P53Z and P55 specifically for pension lump sum payments.

    This HMRC newsletter gives you the details.

    Is there any way to avoid this? I have also read that the HMRC have promised to refund the tax within a month - but is there any way I can avoid it being taken in the first place?
    Many thanks for any information.
    As Dunstonh says, if you have just left employment you can give your P45 to your pension provider. If it's from the last tax year they should still be able to apply it by adding 60 to the code - ie 1000L becomes 1060L. However some pension providers refuse to take the P45 and tell you to contact HMRC.
  • jamesd
    • #4
    • 16th Apr 15, 10:50 AM
    • #4
    • 16th Apr 15, 10:50 AM
    The Reassure claim that it is necessary to wait until the end of the tax year has never been true when the whole pot is being taken. At the start of April 2015 HMRC introduced new procedures so that it is also not necessary to wait where only part of a pension pot is taken.

    It will be necessary to claim a refund because of the way the tax code works.
    • Rafonso76
    • By Rafonso76 13th Oct 16, 8:37 AM
    • 2 Posts
    • 0 Thanks
    Rafonso76
    • #5
    • 13th Oct 16, 8:37 AM
    P 55
    • #5
    • 13th Oct 16, 8:37 AM
    Hi , can any one help me with question 13 on the P55, ,.
    The question says , .....Details of flexibility paid as lump sums.... , does it mean details of the lump sum I am putting this claim for or other expected lump sums ???, Please I will appreciate your help , greetings
    • Fluffyqueen34
    • By Fluffyqueen34 13th Oct 16, 9:07 AM
    • 28 Posts
    • 28 Thanks
    Fluffyqueen34
    • #6
    • 13th Oct 16, 9:07 AM
    • #6
    • 13th Oct 16, 9:07 AM
    I rang up the tax office and they sorted out tax rebate for me.They were very helpful.
    • dunstonh
    • By dunstonh 13th Oct 16, 10:28 AM
    • 85,148 Posts
    • 50,158 Thanks
    dunstonh
    • #7
    • 13th Oct 16, 10:28 AM
    • #7
    • 13th Oct 16, 10:28 AM
    Hi , can any one help me with question 13 on the P55, ,.
    The question says , .....Details of flexibility paid as lump sums.... , does it mean details of the lump sum I am putting this claim for or other expected lump sums ???, Please I will appreciate your help , greetings
    Originally posted by Rafonso76
    Why didnt you just start your own thread asking these multiple questions. Dumping questions on totally unrelated threads is not how discussion forums work.

    You detail the taxable part of the lump sum on pensions you have made lump sum withdrawals from in this tax year.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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