Taking all your money out of a pension pot?

AnotherJoe

notniluk said:

penners324 said:

Why not transfer it to one of your other pension pots?

Just looking for some cash now, I'm 56 so can access it but just wondered if by paying tax at source when you draw it down I'll have to declair it on my tax return, don't want to pay tax on it again!

You haven't paid tax on it !! 

notniluk

AnotherJoe said:

notniluk said:

penners324 said:

Why not transfer it to one of your other pension pots?

Just looking for some cash now, I'm 56 so can access it but just wondered if by paying tax at source when you draw it down I'll have to declair it on my tax return, don't want to pay tax on it again!

You haven't paid tax on it !! 

What I meant was it's taxed when you draw it down, 25% is tax free but the other 75% is taxed

AnotherJoe

notniluk said:

AnotherJoe said:

notniluk said:

penners324 said:

Why not transfer it to one of your other pension pots?

Just looking for some cash now, I'm 56 so can access it but just wondered if by paying tax at source when you draw it down I'll have to declair it on my tax return, don't want to pay tax on it again!

You haven't paid tax on it !! 

What I meant was it's taxed when you draw it down, 25% is tax free but the other 75% is taxed

I still don't see where the "again" comes from. 

If you pay some tax on the 75%,  that will be the first time it's taxed 

Nearlyold

Think the OP is concerned that if he has to declare the  lump sum on his tax return (which he does of course) he'll pay tax again.  

notniluk

Nearlyold said:

Think the OP is concerned that if he has to declare the  lump sum on his tax return (which he does of course) he'll pay tax again.  

Yes that is the worry

Audaxer

notniluk said:

Nearlyold said:

Think the OP is concerned that if he has to declare the  lump sum on his tax return (which he does of course) he'll pay tax again.  

Yes that is the worry

Even if you have to declare it on your tax return, I can't see how you would have to pay tax on it again.  Depending on how much the lump sum is, if added to your existing earnings, I'd be concerned if it could push you into the higher tax bracket, so you end up paying more tax than you need to.

AnotherJoe

AFAICR you do not have to document the tax free portion on your tax return,  and even if you do,  It's tax free so you don't pay any tax on it.

"obviously" you may pay tax on the non Tax free part, if you take that, but you are only paying tax once on that, and for the first time. 

Nearlyold

notniluk said:

Nearlyold said:

Think the OP is concerned that if he has to declare the  lump sum on his tax return (which he does of course) he'll pay tax again.  

Yes that is the worry

You have to declare the non tax free cash on your tax return in the appropriate section "UK Pensions and State Benefits" and HMRC will include it in calculating your overall tax due for the tax year in question. Any tax which you have already paid (eg. payments made on account or in relation to the lump sum the tax already deducted by the pension provider) will be included in calculating how much of the overall tax due you still owe.
You'll probably find your balancing payment will be lower than usual as will your payments on account for the next year because the tax deducted by the pension provider will have been higher than actually due (because of the basis on which its calculated) and the HMRC system will assume there will be same "pension income" and tax deductions by the provider in the next tax year.

steampowered

A pension means investing in shares or funds.

An ISA means investing in shares or funds.

It's the same investment - just a different wrapper. Just change whatever investment is in your pension now, to whatever you want it to be. Paying a whack of tax would be madness.