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Where Taxpayers and Advisers Meet

Cashing in a pension

Kabby
Posts:17
Joined:Thu Feb 07, 2013 6:34 pm
Cashing in a pension

Postby Kabby » Tue May 17, 2016 9:20 pm

Hi all, I am a self employed Taxi Driver(sole trader) who fills in a self assessment tax form every year. My "working" year runs from August to July, so I usually fill in the return at the end of July. I also include income received from a rental property, but these figures relate to 4 April to 5 April. I have two pensions and now I am 55 I am thinking of cashing them in one is worth about £6500 and the other about £30000. I believe that the providers deduct the tax due from the 75% at scource and pay HMRC
My question is do I need to do anything? Do I have to declare it on the self assessment?
Any advice would be much appreciated Thanks in advance

LozaACCS
Posts:1504
Joined:Wed Aug 06, 2008 3:55 pm

Re: Cashing in a pension

Postby LozaACCS » Thu May 19, 2016 8:52 pm

You do need to declare it on your tax return
Have you taken advice, there may be more attractive options then those you have stated.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Cashing in a pension

Postby robbob » Fri May 20, 2016 9:23 am

It is probably in your interests to avoid tax at 40% if possible.

If your income exceeds 42385 this year anything above that will be liable to higher rate tax.As you say 75% of the gorss value will be your "taxable income" add that too your slef employed profit and if that exceeds 42385 you may want to wait till the following year to cash 1 or part (may not be possible) of the pension in.


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