Can Someone tell me how much I would pay to HMRC?

jamesd

loveandlight wrote: »

I am 56. I had £80k and withdrew £20k and used it to pay off debts. That has left me with £60k. Any money I take out I get 25% tax free.

That appears to mean that the original £20k was not all tax free lump sum but was a UFPLS 25% tax free and 75% taxable withdrawal. Is that right?

Aviva have a tax calculator you can use.

You aren't required to take the money out of the pension before you leave the UK (though check where the pension will pay money if you aren't keeping a UK bank account). Little reason to pay 40% income tax when you can save much of that by spreading the taxable part over several tax years. You can do that by taking the whole tax free lump sum from the 60k (assuming it's not yet had 25% taken) and putting the rest into a drawdown account. Then you take out money from the drawdown account at whatever level is tax efficient.

Portugal and some other countries have very favourable income tax treatments for pension income, which includes the 75% taxable portion of a drawdown pot. Nil income tax on foreign pensions in Portugal if you opt in to their scheme. Knowing where you will be going matters a lot, since it could save you a lot of money to wait until you've changed your country of tax residence.

If you took a UFPLS for the first £20k you triggered the money purchase annual allowance and restricted your pension contributions. Would need to pay the annual allowance charge if you went over the reduced 10k/4k annual allowance after doing it.