No Emergency Tax on Triviality Pensions
Published / Last Updated on 13/03/2014
Budget Dec 2012 - No Emergency Tax on Triviality Pensions
Under current pension triviality rules, if you have
- A pension pot worth under £2,000 you can take it all a lump
- If you have total pension funds worth under £18,000, you can take 25% as a tax free lump sum and the balance with tax deducted.
Currently, this taxable amount is taxed under emergency tax at 40% and you then have to reclaim the balance from HMRC if you are a basic rate tax payer (20%) or a none tax payer
Under new rules starting in April 2013, this will now be taxed at 20% meaning that you do not have to reclaim excess tax.
It also, of course, reduces work for HMRC by not having to deal with tax refunds.
Back to UK Budget December 2012 Summary