Pension transfer fund undervalue refund - tax situation

jfinnie

[Deleted User] said:

Brilliant news. 

Here's the regulation: https://www.legislation.gov.uk/uksi/2009/1171/contents/made  You then need to look at s42 FA 2014 to find where the £2,000 limit goes up to £10,000: https://www.legislation.gov.uk/ukpga/2014/26/section/42

Reg 3 says that the payment to you is "treated as a trivial commutation lump sum".  So that means that there are no tests about age to worry about.  As you've got an uncrystallised pension (since you are not 55 yet) the payment is 25% tax-free and 75% taxed - s636B ITEPA: https://www.legislation.gov.uk/ukpga/2003/1/section/636B - under PAYE.

It's likely that your self-assessment tax return will have this pre-populated but if it's not then you need to add it.  If you are a higher or additional rate taxpayer then you'll have extra tax to pay.  Don't forget the extra £50.

Thanks, appreciate you taking the time to link to it and also read it.  I suppose that there is some very specific legislation for this must mean it happens relatively often.  I'll admit my heart sank on my first reading as I spotted the £2,000, only to then be made much happier by the £10,000!