perhaps commute it to my company pension?
2007-01-31 03:43:17 · 7 answers · asked by Boscombe 4 in Business & Finance ➔ Personal Finance
All pensions are taxed. The reason you pay tax is because you would have received tax relief on the original contributions and therefore you pay tax on it now.
The army should offer you a tax free lump sum and depending on what they made changes after Aday (the pension term for April 2006). You will receive a TAX FREE lump sum. There are specific ways in which this is calculated, however without knowing you rules I could not give you specific answers.
In regards to 'commuting to your current company pension'. I assume you mean transfer the benefits in and take it when your company pension is due.This may be feasible, but only if you have not started receiving it, therefore if you consider this you better act quickly to ensure that yu can transfer (some schemes do not allow you to do so within 1 year of retirement).
If you do transfer you will obviously start paying tax on the 2 compbined pensions when you come to retire (assuming they are over the tax thresehold - this is exactly the same tax levels as when in employment).
Please note that under new legislation there are certain rulles applied to recycling your tax free lump sum. This basically means using the tax free lump sum to invest back in to a pension scheme and receive tax relief again (most schemes will have this written in to their retirement option forms). If not then the scheme (i.e. the army scheme) will be liable to pay 40% (i think) on the money you have reinvested. If they have a 'get out clause' then the liability of paying the tax is passed to you. So beware, double check all paper work that you've signed because you could have to pay a lot of tax!
Please not that I am not a finacial advisor but I work in the pensions industry- so anything I have said could change in the future and not be completely accurate (sorry I have to voer myself). But to the best of my knowledge everything I have said is correct - if in doubt see a financial advisor.
2007-02-01 00:18:15 · answer #1 · answered by curly_krill 2 · 1⤊ 0⤋
If it's a lump sum, you might be able to roll in into an individual IRA. Not sure how army pensions work though, but that's what my dad did with his company pension.
If you do that, you won't be able to access it until 59.5 or whatever the age is.
2007-01-31 03:55:23 · answer #2 · answered by parsonsel 6 · 0⤊ 0⤋
D'oh!
you're a army man...
you know how to work a gun...
you could start a new trend and take over from the Post Office Syndrome!!!
and once you've assured you're tax free pension I'll pass on my bosses names, they're very taxing and make me work...
2007-02-03 10:54:29 · answer #3 · answered by sp52uhh 3 · 0⤊ 1⤋
you cant avoid it being taxed. It will be taxed before you receive it
2007-01-31 03:47:19 · answer #4 · answered by Anonymous · 0⤊ 0⤋
There is no escaping the tax man.
2007-01-31 03:53:16 · answer #5 · answered by Ollie 7 · 0⤊ 1⤋
Yes, it's taxable.
2016-05-23 22:55:03 · answer #6 · answered by Anonymous · 0⤊ 0⤋
raffles answer is correct taxed at source maybe you should talk to financial adviser
2007-01-31 04:02:13 · answer #7 · answered by Jim 3 · 0⤊ 0⤋