Gmp Equalisation

snowlaser

Marcon said:

David_Watts2 said:

 Is there any easy way of avoiding the tax hit or do I just have to take it on the chin? 

Just a passing thought - you refer to 'taking the tax hit on the chin' but as you weren't actually expecting anything, you are still better off...

Had the transfer been correctly calculated in the first place the extra money would have been part of your pension pot, subject to tax when you retired.  As it is the error amount is being paid now not at retirement age, so it is being taxed now, that's all.

David_Watts2

@Marcon and @snowlaser thanks for the replies. The letter from Aptia says I should return the relevant form "if you are happy to receive the additional amount as a lump sum" implying that there are alternative ways to receive it but not giving any details.

Is it an option to have the gross amount transferred into a pension rather than receive it as a lump sum with 75% of it taxed? Given a straight choice between the 2 options that's the one I'd have favoured. 

I don't believe that transferring it into the original receiving scheme will be an option because I've taken the maximum tax free amount and subsequent taxable payments but I have a DC pot with L&G which says it will accept transfers in and am contributing £2880 into a SIPP with HL every year (the limit as a non-earner).

I appreciate I may need to check with those firms to confirm their willingness to accept a transfer in of this type but, in theory, is it a viable option to have the money transferred into a pension rather than receive it as a lump sum?

Marcon

David_Watts2 said:

@Marcon and @snowlaser thanks for the replies. The letter from Aptia says I should return the relevant form "if you are happy to receive the additional amount as a lump sum" implying that there are alternative ways to receive it but not giving any details.

Is it an option to have the gross amount transferred into a pension rather than receive it as a lump sum with 75% of it taxed? Given a straight choice between the 2 options that's the one I'd have favoured. 

I don't believe that transferring it into the original receiving scheme will be an option because I've taken the maximum tax free amount and subsequent taxable payments but I have a DC pot with L&G which says it will accept transfers in and am contributing £2880 into a SIPP with HL every year (the limit as a non-earner).

I appreciate I may need to check with those firms to confirm their willingness to accept a transfer in of this type but, in theory, is it a viable option to have the money transferred into a pension rather than receive it as a lump sum?

I'm afraid it's that usual answer in pensions: it depends. Given the amount is under £10K, the trustees can choose to make payment by means of a lump sum rather than giving members choices. But nothing venture... Check that you have a scheme willing and able to accept the top up (sounds as if you have) and then go back to Aptia with the details, saying you'd prefer the payment to be made to that scheme, and see if that's possible. 

David_Watts2

Thanks @Marcon
I have emailed Aptia asking for what the options are (if any) besides taking the lump sum. Acknowledged and in the queue for a reply.

I contacted HL and they misunderstood my enquiry and gave me a detailed reply about options for paying in but ignored the query about transfers. I'll see what Aptia say before I take another crack at them.

An ex-colleague in the same position contacted L&G by phone and was told they can't accept a transfer in because he took the tax free cash from the original transfer (he used the rest to buy an annuity). I'm not convinced by that reply (or that he was clear enough in what he was asking) but, again, I'll await Aptia's response before possibly contacting them myself.

In terms of L&G's response, is this technically still part of the original transfer value or is it effectively a separate small pot in its own right? If the latter I wouldn't have expected what we did with the original transfer value to be relevant to our ability to transfer this amount.

Marcon

David_Watts2 said:

Thanks @Marcon
I have emailed Aptia asking for what the options are (if any) besides taking the lump sum. Acknowledged and in the queue for a reply.

I contacted HL and they misunderstood my enquiry and gave me a detailed reply about options for paying in but ignored the query about transfers. I'll see what Aptia say before I take another crack at them.

An ex-colleague in the same position contacted L&G by phone and was told they can't accept a transfer in because he took the tax free cash from the original transfer (he used the rest to buy an annuity). I'm not convinced by that reply (or that he was clear enough in what he was asking) but, again, I'll await Aptia's response before possibly contacting them myself.

In terms of L&G's response, is this technically still part of the original transfer value or is it effectively a separate small pot in its own right? If the latter I wouldn't have expected what we did with the original transfer value to be relevant to our ability to transfer this amount.

The rules of your scheme will be relevant here, and without knowing what they say, it's not possible to answer that.

David_Watts2

Thanks again. I'm increasingly inclined to go with the simple option and take the cash but I'll wait for Aptia's initial response before deciding on my next move.

As I said, given the two options I'd have gone for the transfer into my DC pot or SIPP but it may be that's either not possible or more trouble than it's worth.