deferred pension arrears extra payment tax

Marcon

Dazed_and_C0nfused said:

Marcon said:

midnight-turkey said:

Thanks yes.. 
They stated I was entitled from 27th April 2024, so yes.
With my first payment of the entire years worth at the ‘non extra rate’
I have since had conversations with a help line advisor at HMRC who didn’t seem to know.
His first guess was when it was paid! Even though he thought this was rather unfair!

Then of course if I take the extra pension instead of lump sum they will pay me the rest of my arrears in this tax year too.

I can’t be the only one, which is why I’m posting out here.

thanks for your post..

Have a look at the first page or so in this thread: https://forums.moneysavingexpert.com/discussion/6610482/civil-service-pension-tax/p1

You can ask to be taxed on the 'statutory basis', which means using the year of entitlement, not receipt.

Although HMRC do that automatically with the State Pension as DWP only tell them about the dates you become entitled to it and the weekly amount.

You wouldn't ask HMRC about that as then everyone involved gets incredibly confused and there was nothing wrong in the first place!

Not when you're claiming a deferred state pension, as one of my neighbours discovered! Theory and practice etc...and of course if you are claiming a lump sum payment when you have deferred your state pension (no longer an option for new deferrals, and hasn't been for some time), there is a truly peculiar tax treatment.

Bettie

You can always defer the lump sum to the following tax year if it is a better option. As Marcon said, the tax treatment is different. I've just had a 9 and a half year lump sum totally tax free by finishing work a few months into the tax year and living on savings the rest of the year.

LITRG

Hello, you may find our guidance on the taxation of deferred state pension lump sums, which incudes examples helpful: https://www.litrg.org.uk/pensions/state-pension/tax-state-pension/tax-deferred-state-pension-lump-sums