How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15755
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I am years young and have available a private pension pot

Resolved Question:

I am 69 years young and have available a private pension pot of £46000
I have already taken the 25% tax free amount some three years ago.
My provider will not allow me to switch to another type of fund, only options are transfer or withdraw the total amount of £46000. I have an annual income of £10250 (state pension) are you able to give me an idea of what Tax I will pay on the £46000 withdrawal please. Thank you
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

Leave this with me while I do a calculation.
Customer: replied 1 year ago.

I look forward to your reply

Expert:  TonyTax replied 1 year ago.
Hi again.

I'm assuming you will take the £46,000 in the 2015/16 tax year.

If you add your state pension of £10,250 to the £46,000 pension withdrawal, you will have a total income of £56,250. Your personal allowance of £10,600 will be deducted and you will pay tax on £45,650.

The first £31,785 will be taxed at 20% (£6,357.00 ) and the balance of £13,865 will be taxed at 40% (£5,546.00). Your total tax liability will be £11,903.00.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

Thank you for your prompt reply, Would the pension provider take the tax liability away from the £46000 and pay me the net amount.

The reason I ask is I have been told that pension providers are taking either 45% or 55% and it is then upto me to sort out any problems or overpayments with HMRC at the end of the Tax year

Thank you

Expert:  TonyTax replied 1 year ago.

The 55% tax rate will only apply to those who are aged under 55 and who are cashing in their pension early so that should not apply to you..

The 45% tax rate is the top rate of tax for those with incomes in excess of £150,000 per annum.

I've read conflicting articles about this but my understanding is that the provider should ask what your other income will be and use that to calculate the tax on the pension fund withdrawal. According to some articles, it may be a problem for those who don't have a tax code. As you only receive state pension, you won't have been issued with a tax code.

If your provider simply deducts a straight 40% or 45%, you can make a claim for an in year tax repayment on a form P50Z instead of waiting to the end of the tax year to get the excess tax back. It would be worth a phone call to your provider to find out what they intend to do as it would not surprise me if different companies adopted different policies.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15755
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions