Tax avoidance

ukdw

Re drawing down £10k a year within your personal allowance so tax free.

As the £12,570 tax free allowance is 'use it or lose it' -  if you are likely to have any spare ISA allowance it might be worth considering drawing down the full  £12,570 tax free and putting the unneeded E2,570 into an ISA (potentially invested in the same funds as the pension).

kevhky1968

ukdw said:

Re drawing down £10k a year within your personal allowance so tax free.

As the £12,570 tax free allowance is 'use it or lose it' -  if you are likely to have any spare ISA allowance it might be worth considering drawing down the full  £12,570 tax free and putting the unneeded E2,570 into an ISA (potentially invested in the same funds as the pension).

Good idea that 👍

handful

You also have the option of UFPLS. This way every time you withdraw from the pension, 25% of it is TFC. This enables you to draw down your personal allowance + 25% TFC without paying any tax. So if your PA is £12500 you could draw out £15625 without paying tax.

Dazed_and_C0nfused

handful said:

You also have the option of UFPLS. This way every time you withdraw from the pension, 25% of it is TFC. This enables you to draw down your personal allowance + 25% TFC without paying any tax. So if your PA is £12500 you could draw out £15625 without paying tax.

That would be £3,906.25 TFLS and £11,718.75 taxable income.

I think you probably mean £16,666.  Which would be £4166.50 TFLS and £12,499.50 taxable income.

handful

Dazed_and_C0nfused said:

handful said:

You also have the option of UFPLS. This way every time you withdraw from the pension, 25% of it is TFC. This enables you to draw down your personal allowance + 25% TFC without paying any tax. So if your PA is £12500 you could draw out £15625 without paying tax.

That would be £3,906.25 TFLS and £11,718.75 taxable income.

I think you probably mean £16,666.  Which would be £4166.50 TFLS and £12,499.50 taxable income.

Yes, apologies for that miscalculation!

eskbanker

handful said:

Dazed_and_C0nfused said:

handful said:

You also have the option of UFPLS. This way every time you withdraw from the pension, 25% of it is TFC. This enables you to draw down your personal allowance + 25% TFC without paying any tax. So if your PA is £12500 you could draw out £15625 without paying tax.

That would be £3,906.25 TFLS and £11,718.75 taxable income.

I think you probably mean £16,666.  Which would be £4166.50 TFLS and £12,499.50 taxable income.

Yes, apologies for that miscalculation!

And to take it to its logical conclusion, drawing out £16,760 gives £4,190 tax-free and £12,570 to fully use up the standard personal allowance....