PENSION LIBERATION ARRANGEMENTS Example - Accessing Money From a Former Employers Pension Scheme Bill gets a text message asking him if he wants to release money from his pension. He finds out he has £28.000 in his former employers pension scheme and agrees to transfer it to another scheme. Because hes short of money and wants access to cash quickly, he accepts hell lose £10.000 of it in fees to the new pension scheme or advisor. He gets £18.000 and spends it. HMRC investigate the transfer and because hes only 42 and has broken the rules by taking his pension early and taking it as a lump sum. They write and tell him he has to pay tax charge of £15.000 (55% of the £28.000 paid out of his pension savings). Bill (not the pension scheme) must pay the tax charge. The tax charge is in addition to the £10.000 which Bill has already paid in fees. So out of the £28.000 pension pot Bill ends up with £3.000. SO! Seek independent advice.
Posted on: Sun, 13 Jul 2014 12:25:15 +0000
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