Pension 25% free

Dazed_and_confused

There are two issues with this,

1). No tax would be deducted from £100 - the emergency tax code only results in tax being deducted when monthly payment, which most pensions discussed on these boards tend to be, is over £988.

2). The whole point of the correct tax code being issued is that it would enable the pension company to refund any excess tax deducted when they make a further payment. There would be no need to contact HMRC.

DairyQueen

Thanks for the correction. I am trying the workaround this tax year and, of course, no tax due on £100.

shilts

Thanks for everyone!!!8217;s help . I!!!8217;ve a fair way to go before retirement but I!!!8217;m planning and trying to learn as much as I can , thanks again !!!55357;!!!56397;

Bravepants

Sorry to barge into the thread, but I hope to be in a similar situation to the OP in 5 years time...
Rather than take the 25% lump sum could I take £1316.66 per month (at current tax allowance and tax free rates that's £15800 per annum).



Would the pension company inform HMRC that 25% of the monthly amount is tax free, and so not issue an emergency code for being over £988?


Cheers.

AnotherJoe

Bravepants wrote: »

Sorry to barge into the thread, but I hope to be in a similar situation to the OP in 5 years time...
Rather than take the 25% lump sum could I take £1316.66 per month (at current tax allowance and tax free rates that's £15800 per annum).
Would the pension company inform HMRC that 25% of the monthly amount is tax free, and so not issue an emergency code for being over £988?
Cheers.

They should.