Pension Flexibility: Taxation of Flexible Pension Payments
Since the introduction of the new pension flexibility changes, that took effect from 6th April 2015, there has been a steady flow of updates from HMRC to the pensions’ industry to help things move smoothly. This one concerns the taxation of flexible pension payments.
Pension Flexibility – How to Reclaim Overpaid Tax
HMRC has issued guidance regarding reclaiming of overpaid tax – or in-year repayments – on ad hoc pension payments in its Pension Schemes Newsletter dated 15th June 2015. To summarise, there are 3 new forms to be used by the individual to reclaim any overpaid tax, these being P50Z, P53Z and P55. HMRC have confirmed that they have a 30 day turnaround for processing these forms.
HMRC is aware that some individuals are using, instead, the standard P50 and P53 forms to request in-year tax repayments on Flexible Pensions. In so doing, repayments claimed using these forms will not fall within the 30 day processing deadline.
Therefore to avoid delays, they have requested that the 3 new forms should be used to request in-year repayments where a pension flexibility payment has been taken from a registered pension scheme.
Click here for further information, where you can also find links to the relevant forms. Specifically:
– Form P50Z is for making a repayment claim for tax when you have stopped working: flexibly accessed pension.
– Form P53Z is for making a repayment claim (tax year 2015/2016) on a flexibly accessed pension lump sum.
– Form P55 is for making a repayment claim (tax year 2015/16) on a flexibly accessed pension payment.
We can help with Pension Flexibility
Inevitably, the new world of pension flexibility has brought in a lot of new rules and regulations – and forms – which can seem difficult and confusing. At Pensions Management Limited we’re here to help, so please do contact us or call us on 0121 693 0690 for advice on flexible pensions.