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i will make it short.
wife has a pension thats dormant and cannot be touched until 2021 she currently works p/time and is a non tax payer due to salary.
if she took the money from the pension pot she would have to pay £3750.00 tax on it my question is for the rest of the year would her salary still be liable for no tax on her monthly salary or would this somehow trigger a tax deduction from wages.
wife has a pension thats dormant and cannot be touched until 2021 she currently works p/time and is a non tax payer due to salary.
if she took the money from the pension pot she would have to pay £3750.00 tax on it my question is for the rest of the year would her salary still be liable for no tax on her monthly salary or would this somehow trigger a tax deduction from wages.
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pays tax on both
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She can take 25% of her pension tax free.,
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.... if over 55
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You need to give more details of exactly what the pension money is - is it a lump sum or is it a pension? Who told you about the tax due?
Secondly, are you aware that if your wife earns below the tax threshold she can transfer a portion of that unused allowance to you? And you can go back into previous years. It takes 2 minutes on-line to do and is worth about £220 a year. |
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Oh, and to answer your question - I assume that the pension tax is calculated on the assumption that she is a full rate taxpayer, so her wages will not be affected. In fact, I would expect you could end up with a tax refund for the tax paid on the pension.
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Thanks for replies, the pension is the full fund value and this is where we get the £3750 figure based on the final figure as she currently earns below the tax threshold, she is over 55. All she wants to do is reinvest the money somewhere else. Then inure is approx £25.000.00. When she had paid the tax on the lump sum will this place her in a position to pay tax on salary for remainder of tax year whereas she is paying nothing and thanks for idea of using some of her allowance but. Did this some 6 months ago,
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Pension pot £25,000....P/T salary say £6,000.
Tax Allowance £11,000... 25% of pension is tax free, so £18,750 taxable...add salary...£24,750...deduct tax allowance ..£13,750 at 20% tax = £2750. Consider drawing pension in smaller slices over a number of years...you could pay no tax at all. |
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2021 is touched date - no sooner..?
isnt that what OP sayed? |
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need Ken Dodd's dog
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Johnnys right they are charging you 20% on the 18750 taxable without taking account of your other earnings or tax free allowance. However assuming Johnnys figure of £6000 p/t wages you would then be able to claim back the £1000 overpaid at the end of the tax year, should you want to take it out, by sending in your P60. Im fairly sure of that but you may want to contact the revenue for confirmation.
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