1/19/2024 0 Comments Income drawdownThe remaining 75% of your pension pot, £75,000 in this instance, will be moved to a drawdown fund and taxed as income as and when you take it (assuming your total income exceeds your personal allowance in any given tax year). This is known as a pension commencement lump sum. If you decide to designate your whole pension to flexi-access drawdown in a single tax year, the first 25% of your pension will be available as tax-free cash, so £25,000 of a £100,000 pension pot. How Much Tax Will I Pay if I Move My Entire Pension into Drawdown? Rather than moving your pension pot to drawdown, you can withdraw cash lump sums (the first 25% of which are tax-free and the remaining 75% taxable) direct from your pot.
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