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TFLS - Self Assessment

I’m thInking of taking some of my TFLS whilst I’m still working, will this trigger me having to do a self assessment? Currently I don’t do one
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Comments

  • molerat
    molerat Posts: 34,755 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 24 January 2024 at 9:02AM
    Commencing a pension will not mean you need to SA.  Why do you think it would? As far as the taxman is concerned a pension is just another PAYE income stream and the TFLS is of no interest to them.
  • tony4147 said:
    I’m thInking of taking some of my TFLS whilst I’m still working, will this trigger me having to do a self assessment? Currently I don’t do one
    Why would some tax free income trigger the need for Self Assessment 🤔
  • tony4147
    tony4147 Posts: 348 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    tony4147 said:
    I’m thInking of taking some of my TFLS whilst I’m still working, will this trigger me having to do a self assessment? Currently I don’t do one
    Why would some tax free income trigger the need for Self Assessment 🤔
    Does the Pension Company inform HMRC when I withdraw part of my TFLS? I’ve read a few things in the papers where people are being put on an emergency tax code when they make withdrawals, I can understand that with the crystallised part of the pension, my concern is the TFLS whilst I’m still working
  • tony4147 said:
    tony4147 said:
    I’m thInking of taking some of my TFLS whilst I’m still working, will this trigger me having to do a self assessment? Currently I don’t do one
    Why would some tax free income trigger the need for Self Assessment 🤔
    Does the Pension Company inform HMRC when I withdraw part of my TFLS? I’ve read a few things in the papers where people are being put on an emergency tax code when they make withdrawals, I can understand that with the crystallised part of the pension, my concern is the TFLS whilst I’m still working
    They probably do yes.

    But I have never heard of pension companies telling HMRC about TFLS causing any issues with it being mixed up as taxable income.


  • Albermarle
    Albermarle Posts: 28,285 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    tony4147 said:
    tony4147 said:
    I’m thInking of taking some of my TFLS whilst I’m still working, will this trigger me having to do a self assessment? Currently I don’t do one
    Why would some tax free income trigger the need for Self Assessment 🤔
    Does the Pension Company inform HMRC when I withdraw part of my TFLS? I’ve read a few things in the papers where people are being put on an emergency tax code when they make withdrawals, I can understand that with the crystallised part of the pension, my concern is the TFLS whilst I’m still working
    A TFLS does not have a tax code, as it is not taxable income.
  • xylophone
    xylophone Posts: 45,667 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    What exactly do you mean when you say "part" of your TFLS?



  • tony4147
    tony4147 Posts: 348 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    xylophone said:
    What exactly do you mean when you say "part" of your TFLS?



    I haven’t touched my pension since I started it, I have approx £120k that can be withdrawn as a TFLS, I’m thinking of withdrawing maybe £10-20k
  • xylophone
    xylophone Posts: 45,667 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I haven’t touched my pension since I started it, I have approx £120k that can be withdrawn as a TFLS, I’m thinking of withdrawing maybe £10-20k

    You have a  Defined Contribution Pension currently valued at £480,000? It has no "safeguarded benefits", for example a Guaranteed Annuity Rate?

    You indicate that you have not yet accessed this pension.

    It is not the workplace pension to which you are currently contributing?

    Before you access the pension, it would be a good idea to have an interview with Pension Wise.

    https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/book-a-free-pension-wise-appointment

    Are you intending to take  a UFPLS?

    See https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/your-options-for-using-your-defined-contribution-pension-pot#Accessing-your-defined-contribution-pension-pot---your-options

    Are you aware of Money Purchase Annual Allowance?


    https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/annual-allowance/money-purchase-annual-allowance

  • tony4147
    tony4147 Posts: 348 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    xylophone said:
    I haven’t touched my pension since I started it, I have approx £120k that can be withdrawn as a TFLS, I’m thinking of withdrawing maybe £10-20k

    You have a  Defined Contribution Pension currently valued at £480,000? It has no "safeguarded benefits", for example a Guaranteed Annuity Rate?

    You indicate that you have not yet accessed this pension.

    It is not the workplace pension to which you are currently contributing?

    Before you access the pension, it would be a good idea to have an interview with Pension Wise.

    https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise/book-a-free-pension-wise-appointment

    Are you intending to take  a UFPLS?

    See https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/your-options-for-using-your-defined-contribution-pension-pot#Accessing-your-defined-contribution-pension-pot---your-options

    Are you aware of Money Purchase Annual Allowance?


    https://www.mandg.com/wealth/adviser-services/tech-matters/pensions/annual-allowance/money-purchase-annual-allowance

    Plenty of information there that I don’t require!
    I'm asking a simple question that no one seems to be able to answer.
    Yes my pot is £480k, there is no GAR, yes I know about MPAA. I’m 61 and will continue to work another 4 years and contribute £40k / yr into my SIPP.
    So currently as my pension stands £120k can be taken as a TFLS, I would like to withdraw a small part of that, but what I don’t know is the mechanics of doing it, will my SIPP provider inform HMRC? Will I be put onto an emergency tax code? Will I have to complete a self assessment or some other form to reclaim tax if HMRC were to tax me? 



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