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Where Taxpayers and Advisers Meet

25% pension tax free lump sum

Sony63
Posts:2
Joined:Thu May 06, 2021 6:46 am
25% pension tax free lump sum

Postby Sony63 » Sun Jun 06, 2021 7:33 am

Hi,

I have taken 25% tax free lump sum from my pension provider and the rest put in a draw down. The question is do i need declare the lump sum on top of my annual salary and pay the extra income tax.

Thanks for your responses

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: 25% pension tax free lump sum

Postby darthblingbling » Sun Jun 06, 2021 1:03 pm

I would have thought the name of the lump sum would have given it away

Sony63
Posts:2
Joined:Thu May 06, 2021 6:46 am

Re: 25% pension tax free lump sum

Postby Sony63 » Sun Jun 06, 2021 1:47 pm

Thanks for the quick reply.

I know you don't pay income tax at source but I wasn't sure if you have to declare it on the online self assessment.

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: 25% pension tax free lump sum

Postby Jholm » Mon Jun 07, 2021 9:50 am

Nope, the lump sum is tax-free. If you include it with your pension income, you will end up paying tax on it.


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