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Income tax will be liable on your State Pension from the moment you begin to draw it. This applies to any lump sum also. There is a concession available. Here is the guidance from the Low Incomes Tax Reform Group:
'The state pension lump sum is taxed in the year of receipt. But you can opt for receipt of the lump sum to be deferred to the next tax year to the one in which you stop deferring. You might choose to do that if, for example, you are a basic rate (20%) taxpayer in the year you stop deferring, but will be a non-taxpayer the following year.'
The same argument would apply also if you were in higher rates tax one year and not in the next.
I do hope that you have found my reply of assistance.
That is why I passed on the option from the Low Income boys.
The following are deductible from rental income [source: which]. Are you offsetting these?
'The most common types of expenses you can deduct are:
The expense should be incurred wholly and exclusively as a result of renting out your property.'
In theory, you can load more onto your wife's account if she has substantial duties in respect of property management. However, HMRC look askance at such schemes as attempts at tax evasion.
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