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Pension
Nickyno
Posts: 135 Forumite
Am I correct in thinking you can take 25% lump sum tax free?
My question is, if you don't take the 25% lump sum will you be taxed on it
My question is, if you don't take the 25% lump sum will you be taxed on it
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If you have a defined contribution pension scheme, you can take 25% tax free either when you first access the pension, or spread over various withdrawals (each of which will have 25% tax free), subject to certain limits: https://www.gov.uk/tax-on-pension/tax-freeNickyno said:Am I correct in thinking you can take 25% lump sum tax free?
My question is, if you don't take the 25% lump sum will you be taxed on it
If you have a defined benefit pension scheme, the rules will dictate how much tax free cash you can take, which will be subject to HMRC maximum limits. You will only have one chance to take tax free cash - at the point you start to draw your DB pension. If you don't take any tax free cash, you'll be taxed on the whole of your DB pension income.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0 -
Am I correct in thinking you can take 25% lump sum tax free?If your pension has a 25% tax free lump sum then yes. If it has a different figure or is a defined benefit scheme then it will be a different amount. If the pension has no tax free cash available, then it would be taxable.My question is, if you don't take the 25% lump sum will you be taxed on itThere are only a very few scenarios where you wouldn't take the tax-free cash. Maybe you could tell us what you are thinking.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
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