UFPLS Taxation

[July 1981]

I’ve recently taken my NRA 65 and I will be paid my UFPLS from my cash balance fund in sixteen weeks, I was wondering if anyone has been through this process and could tell me how the tax was worked out on the payment? For example was 40% applied on the whole amount or did you use your remaining 20% allowance with the remainder charged at 40%, thanks in advance.

[ihatedogs]

I’ve recently taken my NRA 65 and I will be paid my UFPLS from my cash balance fund in sixteen weeks, I was wondering if anyone has been through this process and could tell me how the tax was worked out on the payment? For example was 40% applied on the whole amount or did you use your remaining 20% allowance with the remainder charged at 40%, thanks in advance.

Mate of mine took his nra60/65 this time last year. He was taxed at 40% and then got a refund at the end of the Tax year. I've just taken my RMDCP and have also been taxed at 40%. You can use form S53Z to claim a tax refund now if you'd rather not wait.
https://www.gov.uk/guidance/claim-a-tax ... nsion-p53z

[Wullie10]

But you need to fill in your expected income from Royal Mail for the year. Mine was to high as I no longer do overtime at all . I tried to change this on the Gov App but it wouldn't let me , it stated this is Royal Mails estimate ( too high ) and so I couldn't change it. I've been saying this for some time now. Postman caught between 65 and 67 with full pensions are going to be taxed heavily. Not something you'd want when we should be winding down

[July 1981]

Thanks for your replies, looks like 40% then!

[freespeech]

But you need to fill in your expected income from Royal Mail for the year. Mine was to high as I no longer do overtime at all . I tried to change this on the Gov App but it wouldn't let me , it stated this is Royal Mails estimate ( too high ) and so I couldn't change it. I've been saying this for some time now. Postman caught between 65 and 67 with full pensions are going to be taxed heavily. Not some you'd want when we should be winding down

But you wouldn't pay more tax overall.......it's the way PAYE works......whatever you weekly/monthly pay is for that period the system assumes it will be the same every week so it takes the appropriate tax. As the tax year draws to a close it recognises you have overpaid tax so it adjusts your tax code for the following year to "pay you back".

The bigger issue for me is that we will now have at least three separate pension "incomes" so you need to align your personal allowance accordingly otherwise you could end up not using some of your allowance for one pension when it could have been used to reduce tax liability in another. It's a nightmare having just done it for my wife and her pensions......unless one of your incomes is above the personal allowance anyway then it doesn't matter.

[July 1981]

Is 25% of UFPLS tax free? Thanks in advance!

[RobertT]

Is 25% of UFPLS tax free? Thanks in advance!

Yes.

[July 1981]

Thanks Robert, that’s good news