Jokes0 min ago
Taxed On Pension
11 Answers
A good friend of mine has enjoyed a pretty successful career as a self employed freelance graphic designer since the early 1980s. She was persuaded early on by a financial advisor to put a bit of money away each month into a pension. That was money she'd earned and been taxed on. Now with thoughts of slowing down and retiring not too far away, she has decided to withdraw a chunk from her pension to buy a motorhome and travel. But she is shocked to hear from the pension company that whatever amount she takes from her pension will count as part of her earnings for the year and therefore be taxed like the rest of her earnings. She thinks that as that money was taxed when she earned it before placing it in the pension scheme, she shouldn't have to pay tax on it again. Can anyone in the know advise please?
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question garbled or she was ripped off
pension contributions ( not ISA or bank, or little rainy day accts) are tax relieveed at source
The system was until 1997 EET
exempt cont- exempt maintenance - taxed on disbursement
Mr Brown in 1997 in a tax snatch
sorry you asked if I understoo the sytem ...
made it E E(T) T
exempt cont - some tax at 20% on maintenance/accumulation and Taxed again at disbursement
and this at one stroke killed all the final salary pensions
cause and effect
so she should have had tax relief on contribution
dont ask me - I made sure wivva private pension my conts were tax free
she MAY - as me dear auld mam gawd blesser - think that once tax has once been paid, that no other transaction wiv dat moolah should ever be taxed ever and that includes VAT !
which is not the case and not really the question
pension contributions ( not ISA or bank, or little rainy day accts) are tax relieveed at source
The system was until 1997 EET
exempt cont- exempt maintenance - taxed on disbursement
Mr Brown in 1997 in a tax snatch
sorry you asked if I understoo the sytem ...
made it E E(T) T
exempt cont - some tax at 20% on maintenance/accumulation and Taxed again at disbursement
and this at one stroke killed all the final salary pensions
cause and effect
so she should have had tax relief on contribution
dont ask me - I made sure wivva private pension my conts were tax free
she MAY - as me dear auld mam gawd blesser - think that once tax has once been paid, that no other transaction wiv dat moolah should ever be taxed ever and that includes VAT !
which is not the case and not really the question
I always wonder about "expert" advice recommending handing money to UK pension schemes. Admittedly it is a cursory glance but it looks to me as if putting the same money into prudent savings would over the past 50 years have done just as well (it remains your money at your discretion) and in most cases better in pure coin for coin terms. This is particularly true for people with an income in Pounds Sterling - if the money had been converted into any good currency (last 19 years even the Euro) and got good returns there then the funds would now be well ahead, and that is with tax figured in. In Pound Sterling the real value has gone down considerably more than inflation on the better currencies, and that is without any growth at all in the numbers.
Your friend should have been claiming Tax Relief on her contributions either via her Self Assessment Returns, or claimed on her behalf by the pension company receiving her contributions who should re-invest the refund into her fund.
She should be allowed to take up to 25% of her fund free of tax:
https:/
If she still has the same Financial Advisor, who could possibly be receiving a small fee from the pension provider, they should advise her on what the position is and what course of action she should take to maximise her return, including any retrospective claim from HMRC.
She should be allowed to take up to 25% of her fund free of tax:
https:/
If she still has the same Financial Advisor, who could possibly be receiving a small fee from the pension provider, they should advise her on what the position is and what course of action she should take to maximise her return, including any retrospective claim from HMRC.
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