How can I get £5000? Plenty of assets but low income

hateshousework

Ok, I am living abroad on the £750 pm rental income from letting my home.
House is mortgage free and I have £40,000 savings that I cannot access without paying tax on what I withdraw.

I need approx £5000 to buy land here but after a soft search cannot get accepted for any loans. My overdraft facility is £5000 but I am guessing that would be a really expensive way forward.

any ideas please?

[Deleted User]

Using your savings will probably be the cheapest way.

What tax do you believe you'll be charged? Is it coming out of your pension?

hateshousework

Tbh I am not sure 🤦‍♀️ I had a 60k pension that I had to change to what I think was an annuity, I then took 25% tax free and was told I would pay tax on anything else I withdraw. I have asked my FA for clarification but haven’t heard back yet

Grumpy_chap

Are you over 55 yo?
Are you over the personal allowance?
Are you treated as UK tax payer?  Or some other jurisdiction (abroad)?

robber2

sell one of your assets?

MallyGirl

hateshousework said:

Tbh I am not sure 🤦‍♀️ I had a 60k pension that I had to change to what I think was an annuity, I then took 25% tax free and was told I would pay tax on anything else I withdraw. I have asked my FA for clarification but haven’t heard back yet

Reading this you do you mean that you actually took 25% tax free from a pension leaving £45k in the pension (so not traditional savings)? If you bought an annuity with the rest then it should be paying you an income - is that happening? If you are getting income from an annuity then that money has been spent and is no longer available to you.

If annuity is not the right word and the rest has been put into some form of drawdown then withdrawing it will be liable for tax. If you pay UK tax then you can withdraw £12,570 in a year and pay 0% tax (i.e. no tax even though it is taxable).
You haven't said enough about where you are living and the tax setup so it is unlikely you can get much more help without that info.

hateshousework

Sorry I am being a bit vague but atm I don’t have access to my emails and my phone is too old to allow me access to my financial portal so I cannot find the specifics.
I am 58 and my only income is £9000 pa from a rental property.
I am hoping to upgrade my phone today which will then mean I can take more control of my finances.
I am in West Africa.

Grumpy_chap

The OP is based somewhere in West Africa and therefore may be under a different tax and regulatory regime than UK.

IF the OP is under UK tax and regulation (assume England), then there are some gaps in the information provided but the situation seems to be:

• 58 yo
• £9k per year income from rental property (presumably after expenses associated with the rental property).
• £9k is less than personal allowance (£12,570) and therefore does not incur income tax liability.
• OP needs to understand whether the £9k is after retaining funds back for any larger expenses that will arise in time from the rental property.

Then the savings, or pension, which it would seem:

• These are most likely pension fund and not savings
• OP originally had a pension pot of around £60k and withdrew 25% tax free, leaving around £40k.  (Although those figures are not entirely consistent but I assume some rounding up / down being the reason for the discrepancy.  £60k - 25% would have left £45k not £40k.  It is a detail that is not critical at this stage of the discussion.)
• The OP discussed taking an annuity at some point but presumably did not as the OP does not seem to be receiving the income from that annuity.  It would be quite low, probably £1k per year for a young retiree from £40k fund.
• IF the OP did use the fund to buy the annuity, then the fund is spent and there is no pension fund / savings.
• IF the OP did not buy the annuity, then the £40k is in flex-draw down and whatever is drawn down will be subject to income tax at the appropriate marginal rate.
• IF the OP has £40k in flexi-drawdown, and only other income is the £9k from rental property, then the OP could draw down £3,570 per year without that being subject to further income tax liability.  If the OP draws down more than that amount, the remainder will incur income tax liability at 20%.

Can the OP get through whatever the £5k is required for by drawing down £3,570 and making up the shortfall from the monthly rental income?  A small number of very prudent months may do it.

ALL OF THE ABOVE COULD BE MASSIVELY DIFFERENT IF THE OP IS UNDER WEST AFRICA TAX RULES

As an aside, the OP may wish to consider their retirement funding in the wider context.  Available income seems low to me but may not be a concern if cost of living in West Africa location is more favourable than UK.