Which tax year does drawdown get taxed in?

Ed-1

If you request a defined contribution pension withdrawal today but it isn't processed until after 6th April then which tax year counts for tax?

Mr.Generous

Next year. The date of the request is irrelevant. You have until 5th I think so if they move quickly ...

Scot_39

With many the date for this year is long gone - HL I believe pay on the 28th (or rather for receipt by the 28th - or last working day before) - and need forms etc by the 15-17th - or thereabouts - it changes depending on weekends etc - they have a drawdown timing calculator - on their site.

Guess others will be similar.

Pensions income like salary for normal employee PAYE - is AFAIK taxed when "paid" - not when "earned".

So for instance you can put the funds into drawdown, lift upto the 25% tax free - and leave the rest - and pay no tax at all until actually start drawing the 75% down.  Which can be this year, next year or n years away.  And you only pay the tax on that - at the time.

Ed-1

I rang Standard Life today and they referred me to this information and said that today is the cut-off date for giving them a clear instruction to withdraw taxable income from one of their pensions for it to be treated as a withdrawal this tax year. They said you might get it after 6th April but the guidance says that if they've got a clear instruction they can date it appropriately.

https://www.standardlife.co.uk/adviser/news/end-of-tax-year-arrangements-2022-2023

Scot_39

I phoned HL and one other PP - on 23rd - and was told was already several days late for any new taxable income arrangement for this tax year.

HL suggested could maybe have secured the tax free 25% PCLS on drawdown - by online application - but couldn't guarantee - but then that doesn't matter for when paid - as tax free.