Tax and Pension

[pozzydrive]

Hi

Newbie here, so hope I've posted in the correct forum.

I was wondering what tax I would pay on my pension, first off, for many years I used to work overseas, where when I submitted my tax to the UK government, it was under a double tax agreement from the country I was working in, where tax was paid to that country and a tax certificate provided to HMRC, my percentage of tax would be generally around 40%.

With regard to my pension, I will not be taking an annuity, my pension is worth £240,000, so 25% of that, £60,000 is tax free, so if I take that out and for the rest of the tax year I do not take any further funds, but in the subsequent years, say I only take £11,500 per year, do I have to pay tax on that sum, I was told it would be 40%, which I find hard to believe. Please note, I have not worked for the past two years and have earned no money in that time.

Regards

Pozzy

[easytaxreturns]

Hi Newbie,the issue you shared needs a detail analysis of your tax records. With reference to the gravity of your problem it will be best if you can directly consult with the HMRC about your problem or you may seek the help a professional tax consultant who can properly analyze your details and then gives you a solution.

[robbob]

With regard to my pension, I will not be taking an annuity, my pension is worth £240,000, so 25% of that, £60,000 is tax free, so if I take that out and for the rest of the tax year I do not take any further funds, but in the subsequent years, say I only take £11,500 per year, do I have to pay tax on that sum, I was told it would be 40%, which I find hard to believe. Please note, I have not worked for the past two years and have earned no money in that time.

If you are uk resident and thats your only taxable income (up to personal allowance level) in the tax year then there will be nil tax to pay. Note depending on your tax code in operation tax may be deducted at source and then you would need to reclaim refund as appropriate - i am presuming this is uk pension provider. Once you have had a taxable amount from this provider you should be able to request that your personal allowance is allocated against this pension and drawing money later in the tax year (ideally tax month 12 - 6/3-5/4) will minimise chances of tax being deducted in the first place.

[pozzydrive]

Easytaxreturns - Thank you.

Robbob - I would say that seems a bit more clear and along the lines of what I was thinking, with regard to my Pension, yes it is a UK pension and I am a UK resident, just worked away overseas most of the time, sometimes paying all of my UK tax at home and other times using the double tax agreement process.

What is in operation tax?

Regards

Pozzy

[AnthonyR]

Hi Newbie,the issue you shared needs a detail analysis of your tax records. With reference to the gravity of your problem it will be best if you can directly consult with the HMRC about your problem or you may seek the help a professional tax consultant who can properly analyze your details and then gives you a solution.

Personally, I'd never send someone to HMRC. They have no liability on their advice, carry no PI and I've had several occasions where taxpayers have asked HMRC, been given the wrong information and then HMRC have subsequently discovered the error and penalised the taxpayer... My advice is always to speak with an accountant/tax adviser who can be held liable and has your best interests at heart, rather than maximising tax collection!

[pozzydrive]

Anthony

Thank you, I understand and agree with you. I think I'll contact a consultant.

Regards

pozzy