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Annuity
Pobby
Posts: 5,438 Forumite
Just a thought.What would happen,if on retirement,I chose to purchase an annuity with my various investments and savings.Clearly my state and private pension will be added together and tax would apply but how would an annuity be treated if I had paid tax already on that particular amount of money``on the way in``.To my thinking it would have to be untaxed on the annuity drawings.Probally wrong but any advice please?
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Comments
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An annuity bought from tax money is called a "purchase life annuity" (PLA). It is subject to different tax treatment than a pension annuity. The part of the income paid to you which represents a return of your capital is not taxed.
PLA rates are usually no higher (and can be lower) than pension annuity, because they are mostly bought be people who expect to live for quite a while;) They are better value of you are getting on a bit, late 70s at least.Trying to keep it simple...
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Thanks Ed.If you have time do you have any details you could give me please?0
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