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Purchased life annuities
gadgetmind
Posts: 11,130 Forumite
My retirement planning is currently based on drawdown for pensions pots and high yield shares/ITs for everything else, but I'm sure there will be a point where an annuity is worth considering, particularly for my wife. She doesn't have much pension, but does hold our non-ISA investments, and will be getting my PCLS.
I read that the taxation on a purchased life annuity is different to a normal annuity bought from a pension pot as it is deemed that there is some return of capital, but I haven't been able to find any solid figures regards this.
Does anyone know how the tax is worked out as I'd be interested in dropping this into my "what if" spreadsheet as an option?
I read that the taxation on a purchased life annuity is different to a normal annuity bought from a pension pot as it is deemed that there is some return of capital, but I haven't been able to find any solid figures regards this.
Does anyone know how the tax is worked out as I'd be interested in dropping this into my "what if" spreadsheet as an option?
I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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Thanks. As I expected, it's jolly complicated! Their example shows 16.8% as income and the rest as capital, but I'd have to go through more examples to derive the underlying equations as they don't give them. Or maybe I need to read the wording of the act?
Anyway, it's good to know that it's mostly capital, as that will help a lot.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
It might be worth looking around the websites of the big insurance/pension companies: one of them might explain more. If you do dind something helpful there, may I invite you to tell the rest of us?Free the dunston one next time too.0
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