lump sum tax

thebullsback

Hello everyone, If a Basic rate tax payer has an income of £8400pa and  wanted to take a pension pot of say £20000 after there 25% tax free sum of £5000 would the remaining £15000 be fully Taxable or would the remainder of the personal Tax allowance £4100  still come into play ?
Thank You for Reading 

JGB1955

The £4,100 would also be tax free resulting in tax of £2,180 being payable.

Albermarle

You have to be careful with the wording.
The remaining  £15K is all taxable income . However whether you actually pay tax on it and at what rate ,depends on your personal circumstances.
In you case £4100 would not be taxed and the rest would . That assumes you have no other taxable income at all during the tax year in question. 

thebullsback

Thank you Both That's crystal clear now. Cheers 

molerat

The pension co will tax the 75% taxable element at 1250M1 and will deduct £5030.65 from the payout but a total income of £23.4K should pay £2178 in tax (assuming not Scotland and 1250L tax code).  The overpayment will need to be reclaimed.

thebullsback

thank you Molerat. Remainder into Sipp seams better option now I see how it works 

Dazed_and_C0nfused

The £4,100 is assuming you have the full Personal Allowance and have not applied for Marriage Allowance.

thebullsback

MA not  applied for and just a Basic rate TP