Hello, I'm Keith and happy to help you with your question.
I fear so, but were you to invest them in a private pension scheme they would be allowable against income tax up to 100% of your emoluments subject to a maximum of 40K [14/15 tax year, 50K before]. If this were invested in a SSIP then you could go back several years to mop up unused contribution levels. Remember employers payments into pension schemes are part of the 40K limit.
Here is some Gov UK advice if you are no longer employed:
'If you don’t pay Income Tax You still automatically get tax relief at 20% on the first £2,880 you pay into a pension each tax year (6 April to 5 April) if both of the following apply to you: You don’t pay Income Tax, eg because you’re on a low income Your pension provider claims tax relief for you at a rate of 20% (relief at source)'
I think Hargreaves Lansdowne explains it better:
'You can receive 20% tax relief even if you don't pay tax. The maximum you can contribute is £3,600 gross - a payment of £2,880 to which the taxman adds £720. This is the case even for people who don't pay tax, such as children and non-earning spouses.'
I do hope that brief survey of your position helps.
Thanks, ***** ***** talking about quite large sums e.g. in this tax year I am liable to pay around £100,000 on the lump sum payment. If I put this into a pension could I set the contribution off against the tax liability?