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Where Taxpayers and Advisers Meet

SA Return - Treatment of Lump Sum

alanrichey
Posts:7
Joined:Wed Aug 06, 2008 3:50 pm
SA Return - Treatment of Lump Sum

Postby alanrichey » Sun May 17, 2015 6:29 pm

Just filling in the Self-Assessment for 2014-2015 and need to figure out how to include the withdrawals from my recently setup flexible drawdown pension (worth around £50K). Two points so far:

1. I took out the 25% tax-free amount allowed. Do I actually have to enter that figure (£12.5K) anywhere on the form ?

2. I took an additional £6000. I included that in the 'Pension Received' box. The tax owed was correctly evaluated, but now the system is assuming that I will withdraw a similar amount next year and is telling me I need to pay additional tax in Jan/Jul 2016. How do I enter it as a one-off withdrawal so I don't get billed for the extra tax ?

Thanks

Al

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: SA Return - Treatment of Lump Sum

Postby King_Maker » Mon May 18, 2015 6:31 pm

If you are certain that your Income Tax liability for 2015-16 will be the same/less than 2014-15, you apply for reduced POAs (Payments on Account).

Interest & penalties can apply for erroneous applications.

alanrichey
Posts:7
Joined:Wed Aug 06, 2008 3:50 pm

Re: SA Return - Treatment of Lump Sum

Postby alanrichey » Tue May 19, 2015 8:32 am

So are you saying that there is no way I can declare this one-off lump sum withdrawal on the 2014/15 return without incurring a POA for 2015/16 ?

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: SA Return - Treatment of Lump Sum

Postby King_Maker » Tue May 19, 2015 9:50 am

So are you saying that there is no way I can declare this one-off lump sum withdrawal on the 2014/15 return without incurring a POA for 2015/16 ?
No - re-read my previous answer. POAs are automatic, based on the Income Tax liability for 2014-15.

You need to complete Boxes 10 & 11 on Page TC1, having read the relevant Notes.

alanrichey
Posts:7
Joined:Wed Aug 06, 2008 3:50 pm

Re: SA Return - Treatment of Lump Sum

Postby alanrichey » Tue May 19, 2015 10:28 am

Sorry, I had read your answer, I just didn't believe you couldn't declare a one-off lump sum income for 2014-15 without acquiring a tax liability for 2015-16. Seems astonishing to me, I would have thought lots of people get one-off payments.

Not sure what you mean by 'Boxes 10 & 11 on Page TC1' ? I can't see any reference on the online SA to Page numbers or box numbers.

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Re: SA Return - Treatment of Lump Sum

Postby King_Maker » Tue May 19, 2015 3:19 pm

I use Tax Filing software, so I don't know if HMRC's on-line version is different or not.

TC = Tax Calculation Summary Pages. They are probably the last ones in the Tax Return.


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