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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4091
Experience:  FCCA FCMA CGMA ACIS
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I understand under the new tax rules I can withdraw the monies

Customer Question

I understand under the new tax rules I can withdraw the monies I have in a Drawdown scheme, and that would be subject to 40% taxation, I assume applies currently. If I use the monies to pay off a Lloyds of London charge on my property, incurred due to losses in the early 1990's, can I offset the losses against the taxation on the DD scheme monies?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. If you are over 55 years of age you can liberate pension moneys, but you receive them at your marginal rate of tax which you indicate is 40%. What you do with the moneys liberated is your affair. If you have not claimed the Lloyd's losses in earlier tax years then an offset appears feasible. Be careful though, I would have thought these losses claimed against tax long since. I do hope that my reply has been of assistance.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4091
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  TonyTax replied 1 year ago.
Unless you are a continuing Lloyds member, you will not be able to use the Lloyds losses. Once a trading loss is carried forward, it can only be offset against profits from the same business, not other sources of income. Let me know if you have any further questions.
Expert:  bigduckontax replied 1 year ago.
I did warn you that this loss would have been claimed long since.
Expert:  TonyTax replied 1 year ago.
The other expert said offset was feasible.

Since you want to offset the LLoyds losses against pension income and since pension income is not a Lloyds of London business profit, the offset is not feasible at all. As I said in my answer, trading losses which are carried forward can only be offset against profits from the same business. That's basic knowlege on the tax treatment of business losses.
Expert:  bigduckontax replied 1 year ago.
The Lloyds losses could not be recovered from profits of the same business as with the massive losses at Lloyds this would have been a terminal loss which could have been carried back over the last three years or offset against other income in the final year.
I am thus very surprised that there are any losses to recover although there could well be moneys owing on the account.
Expert:  TonyTax replied 1 year ago.
I don't need to say anything else other than that I was the expert who made the point that trading losses carried forward cannot be offset against other sources of income. I did not say "If you have not claimed the Lloyd's losses in earlier tax years then an offset appears feasible".

We are talking about pension income here which are not Lloyds profits so an offset was never feasible.
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.