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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3924
Experience:  FCCA FCMA CGMA ACIS
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I have just retired as Postmistress after nearly 30 years and

Customer Question

I have just retired as Postmistress after nearly 30 years and received £180.000 + as a lump sum. How can I minimize the tax payable on this? Can I use some of it to pay off the balance of a Buy to Let Mortgage, or pay into Pension fund - then how quickly can I withdraw it. My health is impaired so do not want anything too long term I vaguely remember word of there being special rules for Post Office resignations Any ideas gratefully received.
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. Your inquiry is a tad short on detail so I have thrown in a few possibly relevant points. There appear to be no special rules for Post Office employees. You can do what you like with the moneys received. If you take out a SIPP you can go back three years to utilize unused pension contributions levels which must not exceed 100% or remuneration, 40K current tax year, 50K 11/12, 12/13, 13/14, 14/15. You will loose your personal allowance by a pound for every two you exceed 100K in remuneration in the tax year you receive your lump sum. If this lump sum is actually redundancy pay then 30K of it is tax free. Paying off your buy to let mortgage is probably a good move as from April 2017 to April 2020 mortgage interest relief from rental income on buy to lets will be successively withdrawn. If this lump sum is actually a pension pot repayment then 25% is tax free, but if you are an impaired life with under a year to live it may be entirely tax free. I do hope that my reply has given you some food for thought. This question looks suspiciously like a duplicate I one I answered a few moments ago. If this is so you should request a refund of your fee from Just Answer Administration.

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