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TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have just cashed my pension in with JFM for the amount of

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I have just cashed my pension in with JFM for the amount of £5562.88 and they have notified me that they have sent you a cheque for £834.40 out of that amount. As I do not pay tax can you let me know if that is correct. DianeXXXXXXX XXXXXXXX


This site has no connection to HM Revenue & Customs. However, I can answer your question.

You have cashed in a pension under the "trivial pension" rules. The first 25% of the fund (£1,390.72) will have been paid to you tax free and the balance of £4,176.16 will have had tax deducted at 20% (£834.40). You should have received a cheque for £4,728.48.

If you do not pay tax, you can reclaim the tax deducted by completing an online form P53. Read the notes under the heading "Claiming a refund on a pension lump sum" here. You can also get a paper version of the form by calling the Taxes Helpline.

I hope this helps but let me know if you have any further questions.
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