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Small Pot Rule and new LTA/tax free amount rules
Albermarle
Posts: 31,949 Forumite
I may have missed it, but I do not remember seeing any reference to the Small Pot Rules with the changing legislation
Assuming the rules are still valid, I am wondering whether it is better to cash in two separate pension pots worth around £9,000 each that I have, under the Small Pots rule this tax year or later?
I set them up basically to avoid a LTA % liability on them but obviously things have moved on.
If I cash them in this tax year they presumably will not register for LTA at all being Small Pots( the % is still being monitored even though the tax is 0%) so maybe the tax free cash part will not register in the new system, Meaning I can still take the full £268K tax free at some point?
If I take them later under a new system ( details still not fully finalised AFAIK ) the tax free cash might be counted ?
MPAA is not an issue and regardless of which tax year I take them I will pay 20% tax on the taxable part.
Thanks for any informed comment in this developing area.
Assuming the rules are still valid, I am wondering whether it is better to cash in two separate pension pots worth around £9,000 each that I have, under the Small Pots rule this tax year or later?
I set them up basically to avoid a LTA % liability on them but obviously things have moved on.
If I cash them in this tax year they presumably will not register for LTA at all being Small Pots( the % is still being monitored even though the tax is 0%) so maybe the tax free cash part will not register in the new system, Meaning I can still take the full £268K tax free at some point?
If I take them later under a new system ( details still not fully finalised AFAIK ) the tax free cash might be counted ?
MPAA is not an issue and regardless of which tax year I take them I will pay 20% tax on the taxable part.
Thanks for any informed comment in this developing area.
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