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Pension Commencement Lump Sum
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Metalman
- Posts: 73
- Joined: 10 Oct 2007, 05:34
Pension Commencement Lump Sum
What are you allowed to invest your lump sum in without incurring tax charges?
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RobertT
- EX ROYAL MAIL
- Posts: 6644
- Joined: 09 Sep 2007, 14:26
- Gender: Male
Re: Pension Commencement Lump Sum
A PCLS will normally be tax free, so it won't count towards your normal taxable income. Once it's in your bank account, it's yours to do whatever you want with!
But some chosen investments could incur tax along the way, such as:
Unit trusts / shares, if you exceed the Capital Gains Tax limit when selling; or
A second property.
Otherwise it's fine to invest in the normal things:
Isa's.
Premium Bonds.
Classic cars.
Loose women.
Etc.
The choice is yours.
But some chosen investments could incur tax along the way, such as:
Unit trusts / shares, if you exceed the Capital Gains Tax limit when selling; or
A second property.
Otherwise it's fine to invest in the normal things:
Isa's.
Premium Bonds.
Classic cars.
Loose women.
Etc.
The choice is yours.
Links to all RM pension related websites are here
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Metalman
- Posts: 73
- Joined: 10 Oct 2007, 05:34
Re: Pension Commencement Lump Sum
So it is okay to invest in a Stocks and Shares ISA ?
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RobertT
- EX ROYAL MAIL
- Posts: 6644
- Joined: 09 Sep 2007, 14:26
- Gender: Male
Re: Pension Commencement Lump Sum
ISA's are tax efficient in almost every way!
There is the potential for Inheritance Tax to be paid if you leave your ISA to someone other than your spouse or civil partner, on your death. But it would be paid by that person, rather than you.
This explains more: https://blog.moneyfarm.com/en/investing ... hares-isa/
There is the potential for Inheritance Tax to be paid if you leave your ISA to someone other than your spouse or civil partner, on your death. But it would be paid by that person, rather than you.
This explains more: https://blog.moneyfarm.com/en/investing ... hares-isa/
Links to all RM pension related websites are here
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rambo1
- EX ROYAL MAIL
- Posts: 3266
- Joined: 12 Jun 2013, 20:00
- Gender: Male
Re: Pension Commencement Lump Sum
Yes, I would recommend always invest in a stocks and shares ISA. Especially now that they are changing the amount of dividends you can get tax free out of an ISA. There are limits of course of £20k/tax yr total (between any ISAs you pay into) . If you put in in March then again in April it's possible of course, to put in £40k almost in one go.