Small inherited pension

Confused1_lady

Could really do with some advice as I have inherited a small pension. This pension. Am I best to cash this in and pay tax or could it be transferred into a separate pension and draw half out this year and half out the following year which would bring it under the tax threshold? I am 56 y/o and any advice would be appreciated. 

Marcon

Confused1_lady said:

Could really do with some advice as I have inherited a small pension. This pension. Am I best to cash this in and pay tax or could it be transferred into a separate pension and draw half out this year and half out the following year which would bring it under the tax threshold? I am 56 y/o and any advice would be appreciated. 

Without any details other than the bare bones, it's impossible to know what might be best for you. You refer to 'this pension' but don't actually say what 'this' is! If the person who left you the pension was under 75 at the time of their death, then you wouldn't normally pay tax on it, but from what you say, it sounds as if they were over 75?

Assuming you have the option to transfer it to a separate pension in your name and take half this year and half next to avoid tax, that would make sense from a tax perspective. It might make even more sense to transfer it to a pension in your name and only draw on it in your later years, depending on what other retirement provision you have, and whether that would impact on whether or not you might qualify for state benefits.

Confused1_lady

Hi my father was over 75 so tax is payable. I have my own private pension and would not be entitled to state benefits. Ideally I would like to help out other family members, children (who are tax payers) and grandchildren.