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Hancock in discussions with Treasury about changing GP pension tax rules


Just to highlight how complex this area is Your contribution rate is - Pensionable Pay (whole time equivalent) / Earnings used to assess contributions rate Contribution rate for Scheme year 2015/16 through to Scheme year 2018/19 Tier 4 £26,824.00 to £47,845.99 9.3% 5 £47,846.00 to £70,630.99 12.5% 6 £70,631.00 to £111,376.99 13.5% 7 £111,377.00 and over 14.5% (thats why at the last wage increase some NHS staff didn't have an increase in pay, as their salary took them into the next tier!) AND then when you get your pension you pay the following tax on the amount over the lifetime allowance. RE - The rate of tax charged will depend on whether you take any benefits that exceed the Lifetime Allowance as a pension or a lump sum. The Lifetime Allowance charge is: 55% if you are taking the excess as a lump sum 25% of the capital value where you take it as a taxable pension income. AND its near impossible to calculate the annual allowance tax liability, and then people wonder why we are all leaving.

Posted date

11 Jan 2019

Posted time