Emergency Tax Code for Pension Fund Withdrawal! Can some of the tax paid be refunded?

BernieLondon

Good afternoon all

The Pension Fund I had with my last employer was steadily losing money with their poor/unlucky investments so I was advised to completely withdraw it all before it dropped too low.  So, that is what I did.  The fund was around £41,000. I first received a £12,500 tax free payment. However I was little surprised when the remaining £28,000 was taxed at 40% with an emergency tax code of 1257LX.  This was only last week.

I also have a full State Pension which started last month and a small Private Pension of just under £300.00 a month from a previous employer.  The last pension advice for that stated my tax code was 606L. I also applied for the Marriage Allowance about 6 weeks ago. Not heard anything back about that yet. But I do expect to start paying tax because of both pensions at some time of course.

Anyway...

I am not sure if I am entitled to claim any of the tax back on the 40% I paid?  If so, how do I do it?  Will the HRMC do that automatically at the end of the tax year?  I did try ringing the Tax Helpline this morning and they "blinded me with science".  They were talking about completing form P53Z or P53, waiting until you receive a P60, waiting until you receive a P45 and more.  They were very nice all the same but I just could not take in all that they were saying.

I am totally confused at what to do.

Any help would be appreciated.

Peace all.

molerat

If you have completely withdrawn the pension you should be getting a P45 shortly.

You can reclaim any overpaid tax by going here https://www.gov.uk/claim-tax-refund

You will need to know your total income from each source up to April next year to fill in the form.

HMRC will automatically refund any overpaid tax but it will be around this time next year when they do it.

Looks like you may be due £5K or so tax back.

Who advised you to "withdraw it" rather than transfer elsewhere ?

Albermarle

The Pension Fund I had with my last employer was steadily losing money with their poor/unlucky investments so I was advised to completely withdraw it all before it dropped too low.
Normally the advice would be more likely to be to change the investments within the pension. 
So do you mean you were advised to withdraw it by a regulated financial advisor, or someone else?

Regarding the tax the issue behind it, is that HMRC system assumes you will be paid that amount every month, so taxes you as a higher earner. However as said you can claim back the overpaid tax.