Pension Lta again

Trainpenquin

In Feb 2011 I was forced to take a lump sum because my pension provider wound up the fund and paid tax on this sum. I still have 2 small pension funds that I was hoping to trivialize and take cash but all together they will add up to more than the 1% of this years Lta (£15000). Am I correct in thinking if I take cash I will end up paying 55% tax.:(

mania112

You are not eligible to 'cash in' your pension under triviality rules because the total of ALL your pensions must be under £18,000 - which does not seem to be the case in your situation.

mania112

and that includes the pension(s) you already have in payment.

gadgetmind

And the triviality sum is no longer 1% of LTA but fixed at £18k.

Maybe small pots could be taken under the stranded pots rule?

mania112

^ Yeah, if there's one (or more) under £2k.

gadgetmind

For "one or more" read "two or fewer", but the £2k is spot on.

GhIFA

gadgetmind wrote: »

For "one or more" read "two or fewer", but the £2k is spot on.

And you have to be at least 60 years old.

mania112

I stand corrected.

In order to take advantage of this the scheme rules must allow it and the following

conditions must be met:

• member has attained age 60

• the funds in the personal pension arrangement must not exceed £2,000

• the payment extinguishes the member’s entitlement under the arrangement

• only 2 such commutations are possible in a member’s lifetime.