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bigduckontax
bigduckontax, Accountant
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Thank you answer. i now know the true balance of my pension fund. 427,275.50 GBP

Customer Question

Thank you for your answer.
i now know the true balance of my pension fund. 427,275.50 GBP.
In 2010, on my 50th birthday, I took a tax free draw of 25% of the fund at that time.
Do I get this relief again and only pay the tax on the remainder at the rates you quoted?
My tax coding is Basic Rate.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
Here is the good and the bad news! If you are terminally ill and have under a year to live then you can get your hands on your entire pension pot tax free! Still, that doesn't get us very far, does it?
You made a withdrawal under rules in place in 2010. Essentially they changed on 6 April and only 25% of your pot is available tax free at age 55. You do not, regrettably, 'get this relief again.' However, if you know the value of your pot in 2010 and the value now then 25% of the difference would be available as a further tax free lump sum. It may not be that much though.
Thus a very large chunk of your pension pot, should you elect to convert it to a lump sum will be taxed at 20%, 40% and 45% and you will loose your personal allowance into the bargain. Of course this will be avoided if you leave it invested in the pension fund where it will still be sheltered from taxation. You could, of course, buy an annuity. At your age you will get about 4.4% which would give you a flat rate pension of 18.8K for life.
I do hope I have shown you some of the options available.
Customer: replied 2 years ago.

thanks You have been a greta help

all the best

Graham

Expert:  bigduckontax replied 2 years ago.
Delighted to have been of assistance.
Please be so kind as to rate me before you leave the Just Answer site.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support, Graham.

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