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    • tonyd123
    • By tonyd123 11th Jan 19, 9:11 PM
    • 18Posts
    • 0Thanks
    tonyd123
    income tax/pension pot
    • #1
    • 11th Jan 19, 9:11 PM
    income tax/pension pot 11th Jan 19 at 9:11 PM
    not quite sure ..in fact very unsure,, problem ,getting close to that age called about my old pension pot i have decided to take the pot. 25% tax free the rest taxed at rate 20% problem is with my earnings
    the rest of the pot will push me over 46000 into 40% tax band ..
    how does that work ? do i pay 20% up the higher rate or do i pay 40% on everything i have earned this year approx 32000, hope it works like that ,or does it?
    any advice most helpful
Page 1
    • calcotti
    • By calcotti 11th Jan 19, 9:24 PM
    • 1,941 Posts
    • 1,300 Thanks
    calcotti
    • #2
    • 11th Jan 19, 9:24 PM
    • #2
    • 11th Jan 19, 9:24 PM
    Take your earnings plus the taxable part of the lump sum.
    You get 11,850 tax free.
    From 11,851 to 46,350 is taxed at 20%
    From 46,351 to 150,000 is taxed at 40%

    Do you have an option to take some now and some after 5th April so that you split the sum across 2 tax years? That way you would stay below the higher rate threshold in both years.
    • tonyd123
    • By tonyd123 11th Jan 19, 9:31 PM
    • 18 Posts
    • 0 Thanks
    tonyd123
    • #3
    • 11th Jan 19, 9:31 PM
    • #3
    • 11th Jan 19, 9:31 PM
    the pot was only 22000 i would have liked to take it in smaller pots 3x25
    for the remainder but they didnt have this option i would have to swap it out to another company, but as long as i am only going to pay the higher rate on a small part i dont mind so much
    • tonyd123
    • By tonyd123 11th Jan 19, 9:33 PM
    • 18 Posts
    • 0 Thanks
    tonyd123
    • #4
    • 11th Jan 19, 9:33 PM
    • #4
    • 11th Jan 19, 9:33 PM
    ps not 65 until next month and dont have any plans to retire yet although i may stop working weekends lol!!!
    • xylophone
    • By xylophone 11th Jan 19, 10:10 PM
    • 28,903 Posts
    • 17,505 Thanks
    xylophone
    • #5
    • 11th Jan 19, 10:10 PM
    • #5
    • 11th Jan 19, 10:10 PM
    This old pension is a DC pension?

    Are you currently contributing to a DC pension?

    If so, are you aware of the MPAA if you take anything other than the PCLS from the old pension?
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