UK Pension changes April 2015

[Cirencester]

As most will know its anticipated that from April 2015 certain Pension Plan Pots will be able to be taken in their entirety as cash, subject to Taxation.

My question should be addressed to HMRC but have spent 4 hours today on the phone passed from department to department. Now 25% will be tax free still but in my case I dont use nearly half of my personal taxation allowance some £5000 an annum which currently goes to waste.

Can I apply that unused £5000 over and above the 25% to reduce taxation on the overall pot....?? Or will the 75% incur taxation and any unused personal allowance claimed back the following year ?? Simple question you'd think but clearly HMRC dont think so !!

Thanks...

[evadgib]

Try posting in the existing thread at the top of the page.

HTH

[elliss]

My understanding is the lump sum from your pension pot , can be invested as you wish.

Options, a ISA would be tax free , also the new UK Government pensioners Bond , pays interest @ 4 per cent . taxable.

If you are below the personal taxable allowance of £10.500 , then declare yourself, a non tax payer .

Good luck .

Edited December 2, 2014 by elliss

[Ricardo]

"Can I apply that unused £5000 over and above the 25% to reduce taxation on the overall pot....?"

I certainly hope so, and currently plan to try to do this myself, since I'm still 5 years from getting the (frozen) government-pension, have a couple of small private pension-policies, and wish to use my personal-allowance to-the-full before then, to get my money away offshore and out of their clutches !

If I take the 25% tax-free immediately, but then draw down the 75% potentially-taxable balance in annual sums slightly-lower-than my unused personal allowance, I don't see how it might be taxable ?

I will be paying tax on the draw-down, at my marginal tax-rate, which will be NIL !

In an ideal world, I won't have to re-start filing nil-returns for Income-Tax, I haven't filed (with their OK) for several years now & wish to save HMRC & myself from pointless paperwork. But that's up-to-them.

I view this as pay-back, to the government which has told me it will steal, the first 51-weeks of the pension which I should have been entitled-to. Cheating immoral B'stards !

I really cannot understand why they're being so generous, with these changes to pensions, but I am not complaining !

[meatboy]

your pension pot if taken as a cash lump sum will be taxed at the rate? BUT you can claim the tax back up to your personel allowance.

this lump sum claim can only be made if the pension is private,occupational pensions dont apply.