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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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With new pension regulations ,can my wife( 60yrs) decide not

Resolved Question:

With new pension regulations ,can my wife( 60yrs) decide not to take his pension lumpsum this year and wait to be 65 when she will retire . If she takes her lpsm she will be taxed at 40 pcnt (2015)but if she takes after retirement age she will pay only 20 pcnt on part of it . please advise / regards
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 2 years ago.
Hi again.

When you refer to "pension lump sum" are you referring to an occupational pension lump sum, a private pension lump sum or a state pension lump sum?
Customer: replied 2 years ago.

private pension lumpsum

Expert:  TonyTax replied 2 years ago.
Thanks.

I'll get back to you in a bit.
Expert:  TonyTax replied 2 years ago.
Hi again.

There is nothing to stop your wife deferring her pension regardless of the retirement date she chose when she started the pension plan.

Take a look here for the basic options. If you look here, you will see there is more detail on how the fund can be taken in terms of tax free cash and taxable income. Most private pensions funds allow for 25% to be taken as tax free cash so that would never be taxed at 20%, let alone 40%.

Your wife would need to consult her pension plan provider or an independent financial adviser to find out in detail what her plan will offer as far as the new rules which come into effect on 6 April 2015 are concerned as the options vary from plan to plan.

I hope this helps but let me know if you have any further questions.
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