Pension Tax after Compulsory Redundancy and taking up new job

RED1

OK - slightly different angle on my current situation.

Compulsory redundancy from a Scottish council, redundancy payment agreed and am eligible for pension lump sum and annual pension payment. Age 51.

However - I am to be offered another post with another local authority, possibly starting with them around 8 weeks after I am made redundant with my current employer.

I'm trying to establish if there is a time period in which I can accept the new post and NOT attract taxation of my pension benefits due to them being classed as "unauthorised payments".

I'm not trying to evade anything or work a scam - I'm simply trying to establish if such a time period formally exists (which I'm certain it does) and what that time period is - so I can determine my best course of action.

A few weeks ago I was told the time period was 6 months - ie if I went back into local government within 6 months I would be taxed at 55% on any lump sum payment I'd received :eek: Additionally there could be other sanctions. Fair enough - I can understand that.

This week it has been inferred by my pension administrators that the time period may be one month ie approx 4 weeks!! BIG difference to 6 months eh?

However. they seem VERY reluctant to commit to this in writing. Anyone out there any the wiser??

cheers for help so far

dtaylor84

I am certainly not an expert, but my understanding is any tax issues with taking up a new job with the same employer would be with the up to £30k tax free redundancy payment, not the pension commencement lump sum (or the pension itself, although it may push you into a higher tax band when added to your employment income)

(Edit: I am apparently wrong http://forums.moneysavingexpert.com/showpost.php?p=63174108&postcount=13 ) and I'm not entirely sure why you've started a second thread on the same subject....

RED1

dtaylor84 wrote: »

I'm not entirely sure why you've started a second thread on the same subject....

My question here is specifically to identify what timescale applies during which my pension would be considered an "unauthorised payment"

eg If I were to accept pension and return to local government 8 years later - there would be no penalty.

However 8 weeks later may be a different matter, but no-one is yet able to tell me what the formal cut-off point is.

This week I've been told it is 6 months, then I've been told it could be 1 month. I need formal confirmation of which is correct.