What's tax-free when you get a pension - London

Tuesday, 7 November 2017

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City: London, England
Offer type: Offer
Price: £150


Contact name Rajesh Vekaria
Phone Rajesh Vekaria

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At Finsol tax advisors we provide quality accountancy and taxation services to our clients with expert Accountants in Harrow. Our services are tailor made to enable end-to-end Tax Planning and Tax Consulting Solutions.
Income tax: Income Tax is a tax you pay on your income. You don’t have to pay tax on all types of income.
You won’t usually pay any tax if your total annual income adds up to less than your Personal Allowance.
Lump sums from your pension
You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The tax-free lump sum doesn’t affect your Personal Allowance
Tax is taken off the remaining amount before you get it.
When you can take your pension depends on your pension’s rules. It’s usually 55 at the earliest.
How you can take your pension
A pension worth up to £10,000
You can usually take any pension worth up to £10,000 in one go. This is called a ‘small pot’ lump sum. If you take this option, 25% is tax-free.
You can usually get:
•up to 3 small pot lump sums from different personal pensions
•unlimited small pot lump sums from different workplace pensions
A pension worth up to £30,000 that includes a defined benefit pension
If you have £30,000 or less in all of your private pensions, you can usually take everything you have in your defined benefit pension as a ‘trivial commutation’ lump sum. If you take this option, 25% is tax-free.
If this lump sum is paid from more than one pension, you must:
•have your savings in each scheme valued by the provider on the same day, no more than 3 months before you get the first payment
•get all payments within 12 months of the first payment
If you take payments from a pension before taking the rest as a lump sum, you pay tax on the whole lump sum.
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