Claiming Tax Back

mgdavid

greenglide wrote: »

But a BR tax code deducts tax at 20% on all income.

While it stops you going into the higher rates it doesn't help when trying to prevent paying any tax.

Withdrawing a year's income as a lump sum in April is always going to be a problem. Withdrawal of a lump sum in March is better but would mean waiting a year to switch.

Obv BR does not apply to everyone; I have 4 sources of personal pension income, the largest has a low code allowance as most of it is offset against my SP. I manage my spending (and therefore drawdown) to stay under the HRT threshold so the other 3 all get BR allocated. I usually do one drawdown in April or May, I never have to reclaim any tax although a tiny adjustment sometimes results after SA.

Reluctantpensioner

The system is really stupid with your first drawdown: it doesn't matter which month you draw down in. They will assume you will draw down 12* the amount, even if done right at the end of the tax year in March. (I withdrew £40K, my pension provider taxed it at 45% and zero allowance as if my income was 480K).
The good news is: online P55 is really quick: I got the rebate in about ten days.
Note: P55 is intended to be used only if you plan no further withdrawals in the tax year.

NorthernGeezer_2

So, if you withdraw in March 19 you can complete the P55 and get your tax back in a decent space of time, hopefully April.
As per my original question, i'm assuming it doesnt matter where the tax was taken from, earnings or pension?
Another point, i'm assuming the tax rebate from the previous year is not classed as earnings for the current year?

NorthernGeezer_2

When i was working i upped my tax allowance by claiming some of my wife's married couples allowance.
Now i'm retired can i still do this?

p00hsticks

NorthernGeezer wrote: »

When i was working i upped my tax allowance by claiming some of my wife's married couples allowance.
Now i'm retired can i still do this?

I think you mean that your wife gave you some of her personal tax allowance.



If she's still recieving less than her tax allowance and you're not a higher rate tax payer then she can continue to do so, however you obtain your income (salary or pension).

Mnd

We do exactly that with the married tax code, my wife has her code increased and mine reduced as I am retired and don't pay tax.
I will be looking to drawdown approx £4k from my fund this tax year, I have made an initial £100 withdrawal to generate a tax code first
I too was worried about the tax reclaiming but I have a very cheap chartered accountant to advise me (my son.!) He says any worries phone HMCR and they will sort it easy, that's what they do all the time.

NorthernGeezer_2

Given my last tax code from employment (April 2018) took the married couples coding in to account (in my favour) and that it is my intention to start withdrawing from my pension sometime this financial year, will my new tax code still take in to account the fact i was already in receipt of some part of my wife's allowance or will i have to re-apply for it?

Dazed_and_confused

NorthernGeezer wrote: »

Given my last tax code from employment (April 2018) took the married couples coding in to account (in my favour) and that it is my intention to start withdrawing from my pension sometime this financial year, will my new tax code still take in to account the fact i was already in receipt of some part of my wife's allowance or will i have to re-apply for it?

Assuming you mean Marriage Allowance not Married Couple's Allowance then whatever happens you must not re-apply for it. Anyone who applies for Marriage allowance will either pay the same tax or more because they are giving away some of their Personal Allowance.

Your first payment will be taxed using the emergency tax code of 1185L but once HMRC receive notification of the new pension income they should issue a tax code to the pension company for future payments. This may well be the same code as you received in April 2018(?) but will depend on pension amounts or any other changes which need to be taken into account.

The new tax code should still include the Marriage Allowance.