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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13864
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In May of this year 2015 I took my pension pot as a lump sum

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In May of this year 2015 I took my pension pot as a lump sum and was put on an emergency tax code as everybody is. Could you tell me when do I need to apply for the refund from the emergency code to my actual code? Will it be after April 2016?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your question - I am Sam and I am one of the UK tax experts - could you adviseIt will be after 05/04/2016 that any valid refund can be claimed - as it will not be until after then that HMRC could finalise the whole years income (and tax position) Of course if you have no other income then there may be a way to ask for a review prior to that date.Do you have any other income, pensions, employment, self employment, rental income, investment income or benefits? ThanksSam
Customer: replied 1 year ago.
No I've just retired at 55 from being a Postmaster, the final accounts will go in this year for the business which is why I waited to take the lump sum in 2015/2016 as I will have no other income in that year.
Customer: replied 1 year ago.
To be honest I'm just confirming what my accountant has told me
Expert:  Sam replied 1 year ago.
HI Thanks for your response If you have just retired in this year - AND taken the pension pot in this year - then you will have two sources of income for this tax year - be it though on has ceased. SO you will need to enter the pension lump sum on your tax return - which you will remin needing to complete for 2015/2016 (so after 05/04/2016) I am sorry there is no sooner way to have this reviewed.I should also advise that depending on the size of the pension pot - it may be that tax suffered is right as only 25% of a lump sum pot is tax free UNLESS its less than £30,000 - which I am sure your accountant has alsoa dvsied you ThanksSam
Customer: replied 1 year ago.
No I retired end of 2014/2015 on 28th January and took the lump sum in May 2015 so I assume that would be a different financial year?
Expert:  Sam replied 1 year ago.
Hi Thanks for your response It depends on when you accounts year ran from and to - and you advise that the final accounts will go in this year for the business - ? Have I misinterpreted the information you advised? And may I ask how much was the lump sum to take the full pension pot? AS tax may still be due ThanksSam iT DEPENDS ON WHEN YOUR ACCOUNTS YEAR RANB FROM AND TO.
Customer: replied 1 year ago.
My financial year has always ended 31st January, the lump sum after the 25% tax free is around £70,000
Expert:  Sam replied 1 year ago.
Hi And when did the business cease? (before or after 31st Jan 2015) So the lump sum was £93333 gross ? Is that right ThanksSam
Customer: replied 1 year ago.
Yes the Post Office closed actually on 28th Jan 2015, and yes the full amount was around that figure.
Customer: replied 1 year ago.
You've been very helpful and at least I know now it will be in 2015/2016 when I apply for the refund.
Expert:  Sam replied 1 year ago.
Hi Thanks your response - then you are not needing to worry about the income - as accounts year ending 31/01/2015 (but close of business 28/01/2015) would fall in the 2014/2015 tax year as you indicated (just making sure!) Then we have the pension pot of £93,333 of which the first £23,333 would be tax free leaving £70,000 free of tax. The next £10,600 would be tax free - as these are your personal tax allowances - which leaves £59,400 liable to tax -Then we have to apply the rate bandsFirst £31785 liable to 20% tax £6257Remaining £38215 at 40% tax - £15286 Total tax due £21543 if you have paid more than that - then as long as you will have NO other income between now and 05/04/2016 - then you can write to HMRC detailing this factor and send them copies of the pension pay out document which will also show the tax suffered, and they MAY make a tax refund to you ( but as this breached the 40% rate band they may insist of you completing a self assessment until after 05/04/2016) If the tax suffered is less, then you will owe HMRC - but I am sure your accountant has been through this with you already. Let me know if I can assist any further, but it would be appreciated if you could rate/accept the level of service you feel I have provided you today. Thanks Sam
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Customer: replied 1 year ago.
I have to leave for an appointment at 10am so won't be able to reply again for the next few hours. Any further advice please send it to me. Thank you.
Customer: replied 1 year ago.
Thanks I will rate your service as A1

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