Cash Balance Fund

[freespeech]

If your CB fund is likely to be more than the max lump sum from your NRA65 pension can the excess be applied to anythiung else and remain tax free?

[RobertT]

Not as far as I'm aware!

But 25% of the excess will be tax free, and the remainder coming under PAYE rules and taxed at your marginal rate.

[fosal29]

All your excess CB Fund can be tax free if your total income for the tax year is below your personal allowance (usually £12500). In my case I retired early & my only income in this tax year has been my RM pension which I started receiving in February. I had a excess CB fund of about £5000 which I received with my 1st RMPP payment in February & I paid about £600 tax. With this months RMPP payment all that tax was refunded. I also paid tax on my 1st RMSPS payment but that was also refunded this month.

[onejontwo]

All your excess CB Fund can be tax free if your total income for the tax year is below your personal allowance (usually £12500). In my case I retired early & my only income in this tax year has been my RM pension which I started receiving in February. I had a excess CB fund of about £5000 which I received with my 1st RMPP payment in February & I paid about £600 tax. With this months RMPP payment all that tax was refunded. I also paid tax on my 1st RMSPS payment but that was also refunded this month.

Did you have to apply for the refund or was it automatic?

[fosal29]

I was going to try to claim it back myself at the start of the new financial year but it was repaid automaticity in this month payment.

[RobertT]

All your excess CB Fund can be tax free if your total income for the tax year is below your personal allowance (usually £12500). In my case I retired early & my only income in this tax year has been my RM pension which I started receiving in February. I had a excess CB fund of about £5000 which I received with my 1st RMPP payment in February & I paid about £600 tax. With this months RMPP payment all that tax was refunded. I also paid tax on my 1st RMSPS payment but that was also refunded this month.

These things will always depend on your total income and therefore normal PAYE rules will apply.

Any overpayments of tax should be repaid by HMRC in due course, but it will always come down to individual circumstances to a large degree.

The personal tax allowance is going up to £12,570 from 6th April.