Pension Lump Sum Payment £10,000

Stargirl21

We both work ( I earn £12,000 pa & he earns £21,000 pa) & we receive £10 pw child tax credits as we have 2 children. My partner had a frozen occupation pension - under the pension scheme, he was able to claim the pension once he turned 50. This he has now done this year. He received a £10,000 tax free lump sum in July & receives a monthly pension of £110 per month from now on. We were advised that we did not have to declare this lump sum to the tax credit office, as the lump sum is a tax free payment - & was advised the monthly pension makes no difference to our tax credit award as we are already in the bracket where we are entitled to the minimum award (!)
Is this correct?
Or should we inform the tax credit office because we may have been overpaid after all?

allen35

I think best thing to do is notify HMRC of COC, let them know of increased income through pension and they will be the ones who decide your award, HMRC are not there to cheat anyoneand you will get what you're entitled to.

I am a bit confused as to why you both took the decision to take pension fund whilst partner is still working because of tax credits and taxable pension income...

Allen

sunnyone

Stargirl21 wrote: »

We both work ( I earn £12,000 pa & he earns £21,000 pa) & we receive £10 pw child tax credits as we have 2 children. My partner had a frozen occupation pension - under the pension scheme, he was able to claim the pension once he turned 50. This he has now done this year. He received a £10,000 tax free lump sum in July & receives a monthly pension of £110 per month from now on. We were advised that we did not have to declare this lump sum to the tax credit office, as the lump sum is a tax free payment - & was advised the monthly pension makes no difference to our tax credit award as we are already in the bracket where we are entitled to the minimum award (!)
Is this correct?
Or should we inform the tax credit office because we may have been overpaid after all?

My husband took his pension last year and the intrest from the lump some has to be declared if it is over £300pa and the monthly pension has to be declared on the other income part of the TC form, it may make no diffrance but it must be declared.

Stargirl21

Thanx for yor advice...I'll call the Tax Credit Office today. So I take it that the lump sum your husband received did not count as income in your tax credit claim, only the interest on the lump sum? That's what I was led to believe, as the lump sum is tax free!

sunnyone

Stargirl21 wrote: »

Thanx for yor advice...I'll call the Tax Credit Office today. So I take it that the lump sum your husband received did not count as income in your tax credit claim, only the interest on the lump sum? That's what I was led to believe, as the lump sum is tax free!

Yes the lump sum is tax free and you can spend it or save it in a tax efficent way to keep it that way.