Skip to content
Freeths - Law firm
News Tax 22nd Jun 2015

Tax on pension withdrawals

Concerns have been raised over the taxation of lump sum pension fund withdrawals over and above the 25% tax-free allowance. This is because unless the planholder supplies their pension provider with a P45 form obtained from their employer, HM Revenue and Customs will apply emergency coding which will assume payments of the same magnitude will continue to be made on a regular basis and tax calculated accordingly.

Any overpaid tax would usually be reclaimed subsequently through self-assessment or PAYE, the good news is HMRC has now issued a new form P55 which should ensure repayment of any tax due is made within 5 working weeks. There has been confusion over the wording of this form, however it has been established that the form can be used when more than one lump sum withdrawal is made during the course of a year.

As always with this type of financial decision you should consult a financial adviser to ensure you are fully informed and be in a better position to manage any income tax payable.

Client service

‘Doing the right thing’ is at the heart of Freeths. Find out more about our excellent client service and the strong set of values that guide the way we work.

Our service

arrow

Talk to us

Freeths are a leading national law firm with 13 offices across the UK. If you have a query about our services or just want to find out more, why not give us a call?

Contact: 03301 001 014

Choose an office:

Portfolio close
People CV Email

Remove All


Click here to email this list of people to a colleague.