UK pension question(s)

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YT Oxford 20 May 19 10.57pm
Originally posted by cryrst You can take 25% tax free at 55. Also in rare cases with approval of the regulators and/or tax man if you contract a proven terminal illness like cancer they may let you have it all tax free. This may be really rare but is out there to be requested. Happy chappy aint i. The prognosis for the terminal concession has to be less than 12 months. Yes, from 55 you can take 25% of the fund tax-free, but you have to apply the other 75% to taxable benefits at the same time. In other words, you can't just take the tax-free bit and leave the rest. I invited the OP to PM me for further advice but he didn't. I imagine that he has a relatively modest fund, in which case my advice would be to cash the lot in at 55. As you say, 25% of the fund would be tax-free. Then the other 75% would be taxable at the OP's marginal rate. Given that he is a USA resident, then I assume that his marginal UK tax rate = nil, therefore he could actually cash in the lot tax-free. Except he would then have to check whether any USA tax would be payable by him. Edited by YT (20 May 2019 10.59pm) Palace since 19 August 1972. Palace 1 (Tony Taylor) Liverpool 1 (Emlyn Hughes)
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Oxford 20 May 19 10.57pm

Originally posted by cryrst

You can take 25% tax free at 55.
Also in rare cases with approval of the regulators and/or tax man if you contract a proven terminal illness like cancer they may let you have it all tax free.
This may be really rare but is out there to be requested.
Happy chappy aint i.

The prognosis for the terminal concession has to be less than 12 months.

Yes, from 55 you can take 25% of the fund tax-free, but you have to apply the other 75% to taxable benefits at the same time. In other words, you can't just take the tax-free bit and leave the rest.

I invited the OP to PM me for further advice but he didn't. I imagine that he has a relatively modest fund, in which case my advice would be to cash the lot in at 55. As you say, 25% of the fund would be tax-free. Then the other 75% would be taxable at the OP's marginal rate. Given that he is a USA resident, then I assume that his marginal UK tax rate = nil, therefore he could actually cash in the lot tax-free. Except he would then have to check whether any USA tax would be payable by him.

Edited by YT (20 May 2019 10.59pm)

Palace since 19 August 1972. Palace 1 (Tony Taylor) Liverpool 1 (Emlyn Hughes)

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the.universal 20 May 19 11.26pm
Originally posted by YT Not wrong, but ultimately destroyed by endless governmental interference. This isn't a political point, as every government since 1978 (when I started out in pensions) has played its part in the decline of the final salary scheme. Edited by YT (17 May 2019 6.57pm) To be fair to our politicians, it was mainly ever increasing life expectancy that did away with final salary pensions. At least we dealt with it rather than stuck our head in the sand like some of our Mediterranean friends. Vive le Roy!
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the.universal 20 May 19 11.26pm

Originally posted by YT

Not wrong, but ultimately destroyed by endless governmental interference. This isn't a political point, as every government since 1978 (when I started out in pensions) has played its part in the decline of the final salary scheme.

Edited by YT (17 May 2019 6.57pm)

To be fair to our politicians, it was mainly ever increasing life expectancy that did away with final salary pensions. At least we dealt with it rather than stuck our head in the sand like some of our Mediterranean friends.

Vive le Roy!

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cryrst The garden of England 21 May 19 6.19am
Originally posted by YT The prognosis for the terminal concession has to be less than 12 months. Yes, from 55 you can take 25% of the fund tax-free, but you have to apply the other 75% to taxable benefits at the same time. In other words, you can't just take the tax-free bit and leave the rest. I invited the OP to PM me for further advice but he didn't. I imagine that he has a relatively modest fund, in which case my advice would be to cash the lot in at 55. As you say, 25% of the fund would be tax-free. Then the other 75% would be taxable at the OP's marginal rate. Given that he is a USA resident, then I assume that his marginal UK tax rate = nil, therefore he could actually cash in the lot tax-free. Except he would then have to check whether any USA tax would be payable by him. Edited by YT (20 May 2019 10.59pm) I thought any above your tax code amount was just that ..taxed. Taken at any age. No matter how old you are. So taking 25% tax free surely doesnt change anything.
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cryrst

The garden of England 21 May 19 6.19am

Originally posted by YT

The prognosis for the terminal concession has to be less than 12 months.

Yes, from 55 you can take 25% of the fund tax-free, but you have to apply the other 75% to taxable benefits at the same time. In other words, you can't just take the tax-free bit and leave the rest.

Edited by YT (20 May 2019 10.59pm)

I thought any above your tax code amount was just that ..taxed.
Taken at any age.
No matter how old you are.
So taking 25% tax free surely doesnt change anything.

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cryrst The garden of England 21 May 19 6.21am
Originally posted by the.universal To be fair to our politicians, it was mainly ever increasing life expectancy that did away with final salary pensions. At least we dealt with it rather than stuck our head in the sand like some of our Mediterranean friends. Forced life expectency by trying to make us healthier and healthier was always going to cost a lot. The long game wasnt considered.
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cryrst

The garden of England 21 May 19 6.21am

Originally posted by the.universal

Forced life expectency by trying to make us healthier and healthier was always going to cost a lot.
The long game wasnt considered.

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YT Oxford 21 May 19 6.55am
Originally posted by cryrst I thought any above your tax code amount was just that ..taxed. Taken at any age. No matter how old you are. So taking 25% tax free surely doesnt change anything. I'm talking about the OP being a US resident and assuming that he's not liable for UK tax, in which case the 25% will be "tax-free" and the 75% will be "taxable" but the rate will be nil (because he's not liable for UK tax). But he would have to research his own tax position - I'm not an expert in that area. You say "taken at any age", but you mean any age from 55 onwards. Thinking about a 'normal' UK resident, you basically are correct about the tax situation. The "75%," - whether you take it in one go or as a series of withdrawals or as an annuity - is classed as income. That income is then added to all your other income, and the total income minus the personal allowance is subject to tax. Palace since 19 August 1972. Palace 1 (Tony Taylor) Liverpool 1 (Emlyn Hughes)
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Oxford 21 May 19 6.55am

Originally posted by cryrst

I thought any above your tax code amount was just that ..taxed.
Taken at any age.
No matter how old you are.
So taking 25% tax free surely doesnt change anything.

I'm talking about the OP being a US resident and assuming that he's not liable for UK tax, in which case the 25% will be "tax-free" and the 75% will be "taxable" but the rate will be nil (because he's not liable for UK tax). But he would have to research his own tax position - I'm not an expert in that area.

You say "taken at any age", but you mean any age from 55 onwards.

Thinking about a 'normal' UK resident, you basically are correct about the tax situation. The "75%," - whether you take it in one go or as a series of withdrawals or as an annuity - is classed as income. That income is then added to all your other income, and the total income minus the personal allowance is subject to tax.

Palace since 19 August 1972. Palace 1 (Tony Taylor) Liverpool 1 (Emlyn Hughes)

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the.universal 21 May 19 7.36am
Originally posted by cryrst Forced life expectency by trying to make us healthier and healthier was always going to cost a lot. The long game wasnt considered. Those fcukers Vive le Roy!
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the.universal 21 May 19 7.36am

Originally posted by cryrst

Forced life expectency by trying to make us healthier and healthier was always going to cost a lot.
The long game wasnt considered.

Those fcukers

Vive le Roy!

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cryrst The garden of England 21 May 19 12.28pm
Originally posted by the.universal Those fcukers I get tongue in cheek but cmon We know fags chips beer and everything that tastes nice is bad for you. Trouble is I don�t need some learned tnuc keep telling me I�m goner die young. I kin know. Why live to 137 if for the last 40 years you either can�t afford it or are not very mobile. What a load f nannying prats.
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cryrst

The garden of England 21 May 19 12.28pm

Originally posted by the.universal

Those fcukers

I get tongue in cheek but cmon
We know fags chips beer and everything that tastes nice is bad for you.
Trouble is I don�t need some learned tnuc keep telling me I�m goner die young.
I kin know.
Why live to 137 if for the last 40 years you either can�t afford it or are not very mobile.
What a load f nannying prats.

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