Paying £2880 into pension when retired

AlwaysLearnin

You appear to be including the tax free lump sum amount in your taxable income calculations.  By definition that amount isn't taxable income.

Also FYI, the £5k starting savings allowance isn't lost on a cliff edge basis, i.e. you lose £1 of the allowance for every £1 taxable income over your personal allowance

Rob749

Another question on UFPLS, can I make 2 UFPLS withdrawals in same tax year, I realise all the tax implications etc, just want to know if I can withdraw twice from the same SIPP. Can't seem to get a straight answer from Googling it.

vixen1500

Dazed_and_C0nfused said:

You have misunderstood how the savings starter rate of tax works.

But I'm a bit lost as to where yo use getting the £12,700 figure from in the first place?
What is the £6,500 other income?  Pension, wages, business profit???
ANSWER - Self employed wage
If you have £6,500 and £4,400 where is the other £1,800 coming from?  What is this income, pension, wages, business profit???
ANSWER - £1,800  = 25% TAX FREE 
ADD To £6,500 wage + £4,400  = £12,700
Totally wrong  I  now know AlwaysLearnin said:

You appear to be including the tax free lump sum amount in your taxable income calculations.  By definition that amount isn't taxable income.

Also FYI, the £5k starting savings allowance isn't lost on a cliff edge basis, i.e. you lose £1 of the allowance for every £1 taxable income over your personal allowance

So, I  can withdraw £1,800 tax free 
PLUS the difference between tax allowance of 12,500 and my earnings  and not pay tax
So leaving a balance of £1,000 in the account gives me a further £4,400 to withdraw 
The  £6,500 wage + £4,400 = £10,900 so I  can still transfer £1,250 of my allowance to OH,  so he could use it the withdraw more from his pension tax free

Thanks for your help
Hopefully I have it right this time

Dazed_and_C0nfused

vixen1500 said:

Dazed_and_C0nfused said:

You have misunderstood how the savings starter rate of tax works.

But I'm a bit lost as to where yo use getting the £12,700 figure from in the first place?
What is the £6,500 other income?  Pension, wages, business profit???
ANSWER - Self employed wage
If you have £6,500 and £4,400 where is the other £1,800 coming from?  What is this income, pension, wages, business profit???
ANSWER - £1,800  = 25% TAX FREE 
ADD To £6,500 wage + £4,400  = £12,700
Totally wrong  I  now know AlwaysLearnin said:

You appear to be including the tax free lump sum amount in your taxable income calculations.  By definition that amount isn't taxable income.

Also FYI, the £5k starting savings allowance isn't lost on a cliff edge basis, i.e. you lose £1 of the allowance for every £1 taxable income over your personal allowance

So, I  can withdraw £1,800 tax free 
PLUS the difference between tax allowance of 12,500 and my earnings  and not pay tax
So leaving a balance of £1,000 in the account gives me a further £4,400 to withdraw 
The  £6,500 wage + £4,400 = £10,900 so I  can still transfer £1,250 of my allowance to OH,  so he could use it the withdraw more from his pension tax free

Thanks for your help
Hopefully I have it right this time

You should just forget about the TFLS when you are working out your tax situation.  It is called the tax free lump sum for a reason 

If your only non savings/non dividend (taxable) income is £10,900 and you apply for Marriage Allowance then you will have no tax to pay on that income as it is covered by your reduced Personal Allowance of £11,250.

You can then have £6,351 taxable interest before you would have any tax to actually pay on it.
£350 - covered by the remaining Personal Allowance
£5,000 taxed at 0% (savings starter rate)
£1,000 taxed at 0% (savings nil rate)
£1 taxed at 20% (savings basic rate)

If you go ahead and do this you should be aware that HMRC will include an adjustment in your tax code to reflect the fact that your savings interest is using up some of your Personal Allowance.  

So for example if you have £2,000 untaxed (taxable) interest then your tax codes might be something like,

Job tax code = 650N
Calculated
Personal Allowance £11,250
Less Allowances used at pension £4,400
Less untaxed interest £350
Tax code allowances £6500 = tax code 650N

Pension tax code = 440T

vixen1500

"You can then have £6,351 taxable interest before you would have any tax to actually pay on it."
£6,351 in interest!  WOW -  would have to have mega savings to get that.
Thanks so much for helping me out with this,  will get my forms completed tomorrow, hopefully it will come through in time to pay into this years ISA

vixen1500

Hiya, just read this on another thread

The parents could use Hargreaves Lansdown for this arrangement and pay nothing?

Open SIPP, no fee.

Contribute, no fee.

Hold in cash, no fee.

Wait for tax relief.

Arrange with HL to take PCLS and the balance as income - no fee.

Just wondering what PCLS is?

I have just filled in a form to withdraw by UFPLS 

Thanks in advance 

Rob749

PCLS is the tax free lump sum you can take,, typically 25% of your total pension pot..

Rob749

Forgot to say, or 25% of your UFPLS withdrawal.

vixen1500

Hi again, 
Sent off my UFPLS form to HL,  today OH  form has arrived but they have also sent one for 'Drawdown'.
Reading through the leaflets both seem to allow you to do the same thing,  withdraw 25% tax free, plus additional taxable money.
Obviously there has got to be a difference but I can't see what.
(Also can I use UFPLS to withdraw from a stakeholder pension scheme?)
Many thanks 

vixen1500

Hi again, 
Sent off my UFPLS form to HL,  today OH  form has arrived but they have also sent one for 'Drawdown'.
Reading through the leaflets both seem to allow you to do the same thing,  withdraw 25% tax free, plus additional taxable money.
Obviously there has got to be a difference but I can't see what.
(Also can I use UFPLS to withdraw from a stakeholder pension scheme?)
Many thanks