MAXIMUM draw down, without tax

xylophone

Or do you have two relatively small pensions?

I would be very surprised if this were the case as Mrs DD's pension seems to be intended for foreign adventures.....

https://forums.moneysavingexpert.com/discussion/5930135/cash-in-pension-pot/p3

Dirty_Dick

Xylophone, you know me so well  !!!!

Dazed_and_C0nfused

TBC15 said:

Dazed_and_C0nfused said:

She can drawdown £10,560 in taxable pension before she would be liable to tax.

Depending on where she is resident for tax purposes she can take an additional £1,250 or £1,316 (Scottish resident) on top of the £10,560 on which there would be £250 tax liability but this would then be reduced to £0 as she gets a £250 tax deduction if she has got Marriage Allowance.

So that she doesn't pay tax unnecessarily during the tax year HMRC should give her higher tax code allowances.  In her case it might be something like 194M (current pension) and 1181T (drawdown).

Why is it £1316 for Scotland?

Scotland has a 19% tax rate so the first £1,316 of pension (or earnings) income above the Personal Allowance would be taxed at 19%

£1,316 x 19% = £250.04

Which would be reduced to £0.04 by the Marriage Allowance tax credit of £250

Dazed_and_C0nfused

Dirty_!!!!!! said:

No, I draw about £22000 on my occupational, and about £7800 on my state pension

Very generous of you then 

xylophone

Very generous of you then

We....ll...

Mrs DD is going to be paying for the cruises to the Bahamas.......DD is contributing the £250 to tip the waiters.....

Dirty_Dick

Luckily, she leaves ME to deal with the finances  !!  and she's pleased when I get her a red wine  !!

Dirty_Dick

Will it make any difference as to what part of the financial year the draw-down is done ?  
We've not drawn down yet for this financial year, so draw-down before that, and draw-down the following week 

xylophone

Your wife can use her tax allowance for 19/20 in the current tax year (she still has time to sort this out but I wouldn't leave it too long) and her allowance for 20/21 after 6 April.

Dirty_Dick

Thanks to all that pointed me in the right direction