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Expert Lu
Expert Lu, Business Consultant
Category: Tax
Satisfied Customers: 231
Experience:  ACCA Diploma
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I'm a carer which means when it come to Tax I have a £10,000

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Hi, I'm a foster carer which means when it come to Tax I have a £10,000 fostering allowance Plus £200 per per child under age 11 = £20400. I usually earn approx £15500 plus Boarding out allowance (not pay) £7900 this covers utilities, clothes etc. I now have a private Bank pension maturing due in Dec 21. If I take the tax free lump sum of approx 50.000 which gives me a pension of approx £9000 per year PLUS continue to foster will I pay tax and if so at what point/amount. Plus do i pay tax n the tax free lump sum if i continue working.
JA: Have you talked to a tax professional about this?
Customer: Ive asked a few questions but don't understand exactly about continuing to work, the fostering allowance and pension and if i will pay tax
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: No

Hello  and welcome

I am an expert with JustAnswer  and I am happy  to assist  you with your question. Yes you will be tax if you draw a lumsum , 25% will be free the rest of the 75% will be taxed .

Please kindly feel free to ask if you need me to clarify  my answer.

Thank you in advance

Customer: replied 8 days ago.
If I don't take the lump sum does that mean i don't pay tax even if i continue working?
Customer: replied 8 days ago.
If I earn £15500 per year at the moment I don't pay tax due to the fostering allowances i.e. £10000 & £200 per week =£20400 per year. Once I start getting my bank pension will I pay tax on this or just the amount of pension which goes over £12500 fresh hold?
Customer: replied 8 days ago.
I need clarification please

Will yiu be drawing from the pension ?

Customer: replied 8 days ago.
in Dec 21, so i need to choose my option, a. lump sum plus £8-9000 per year or b. £10600 per year.
Customer: replied 8 days ago.
but i will be continuing to foster so earning which my dilemma.
Customer: replied 8 days ago.
I can earn 20400 including the fostering allowances without paying tax. what confuses me is my pension, will I start paying tax on the pension only of approx £9000 per year.
Customer: replied 8 days ago.
the pension I receive per year will only be approx £9000 so does this mean i wont pay tax on either as my foster allowance covers the fostering pay AND my pension is below the £12500 threshold?

Hello , if it is below your allowance they will be no tax on that.

Expert Lu and other Tax Specialists are ready to help you
Customer: replied 8 days ago.
Thank you

You are most welcome