I suspect that the answer to this question is "no" but I cannot find a clear answer online.
In brief, for the last few months I have drawn down a regular monthly payment from my LTA-exceeded DC fund. The provider deducts LTA tax at 25% and I pay income tax at 40% upon receipt. However, if I continue to do this during this new tax year, I will start to lose my Personal Allowance as I will exceed £100k adjusted net income. This will push my effective marginal tax rate up to 70%.
I am hoping that if I take an equivalent sum to the 12 monthly payments out as an LTA Excess Lump Sum, then I will just pay 55% tax and my Personal Allowance will be preserved.
If I am correct, I'm surprised that the many websites covering the pros and cons of LTA-exceeded monthly draw down versus lump sum don't seem to mention this issue?
Richard
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