YOUR MONEY; Your money queries are answered by Trevor Clark, Director of Rutherford Wilkinson Ltd, Chartered Financial Planners.
Q. I have recently taken a lump sum from my pension as a one-off payment. I am a basic rate taxpayer but the withdrawal was taxed at more than 29%? I understand the basic rate of tax is 20%, so why would I have been charged more than that, and can I get any of the extra tax back? A. Under HMRC rules, when pension funds are accessed in this way, withdrawals generally have tax deducted from their payments at rates assuming they would take the same amount every month for the rest of the tax year. If you don't in fact make those further withdrawals, the system can result in more income tax being paid than was in fact due.
The good news is, you can complete an HMRC form P55 known as the Flexibly Accessed Pension Payment: Repayment Claim. Assuming the income you withdrew, when added to your other income in the tax year, does not make you a higher rate tax payer, you should be eligible for a tax refund.
Q. I have been discussing seeing a solicitor to sort out our wills with my wife. She is reluctant to as she considers them expensive and assumes I would get what is hers and vice versa. Are we burying our head in the sand? A. If you do not leave a valid will your estate will pass in accordance with the intestacy rules which set out who is entitled to inherit from your estate.
As you are married the first person entitled to your estate under the intestacy rules is your spouse, but she will not necessarily inherit the whole of your estate, this depends on how much is in your estate and if any other blood relatives survive you.
Having a will ensures your estate passes exactly to who you would want to benefit from it. The cost of a will is really quite cheap compared with the time and expertise that a solicitor can bring to it, and can avoid significant legal costs being incurred by your estate after death.
I recommend all of my clients have wills and at the same time consider Enduring Powers of Attorney.
| If you have a question you would like Trevor to answer, please email it to: firstname.lastname@example.org or post it to Your Money, Rutherford Wilkinson Ltd, Northumbria House, 21 23 Brenkley Way, Blezard Business Park, Newcastle, NE13 6DS. Call 0191 217 3340 or visit www.rwpfg.co.uk (We cannot guarantee that your question will be featured). Rutherford Wilkinson Ltd is authorised and regulated by the Financial Conduct Authority.
|Printer friendly Cite/link Email Feedback|
|Publication:||The Journal (Newcastle, England)|
|Date:||Oct 11, 2017|
|Previous Article:||GDPR - are you ready?|
|Next Article:||Burger business is rebranded after bunfight over name.|