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Tax on withdrawal of Pension Funds
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It just seems ridiculous that Prudential cannot explain to HMRC that this is a one off pay-out. HMRC could tell them my tax code. They could even advise them of my regular income and what % to take off.
AFAIUI, it does not work like that. HMRC will not issue a tax code until the first payment is made. I presume it is because issuing provisional codes for payments that may or may not happen is an admin nightmare.
For example how would the Pru know ( or HMRC ) that you might take another pension lump sum in the following months from another provider.
In the end you will get any overpaid tax back.
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