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Where Taxpayers and Advisers Meet

Pension lump sum as income for IHT gifting

Strasbourg1955
Posts:4
Joined:Sun Aug 04, 2024 11:42 pm
Pension lump sum as income for IHT gifting

Postby Strasbourg1955 » Mon Sep 07, 2026 12:48 am

I have an untouched private pension. I want to withdraw just the tax free 25% in a way which counts as income, so that I can give the excess above my needs to my offspring. I know how gifts-out-of-income work and have already started a pattern of regular gifting (IHT403). I've read you can achieve this with pension if you don't take a single lump sum but split it into mini-payments. My pension company Fidelity says I can take the tax free portion in instalments, but I have to initiate a withdrawal each month rather than set up a regular plan till the 25% runs out. Will this still count as income? On my bank statements it will be an income payment each month, although behind the scenes that payment will have been generated by me requesting a withdrawal.

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