Is unlocking your pension taxable?

My sister is being made redundant by Tyco Medical Company.
She was thinking of releasing her pension to square off her mortgage
She has paid into her pension 拢39000.
And the pension goup says that she can get 拢12000 of this
Can you tell me if she unlocked her pension fund is that taxable.

Would I be right in thinking that she is over 50? In which case she would be taking the tax-free cash sum available. Which wouldn't be taxable. It would leave her with a reduced pension though.

The world of pensions is rather complex, depending on what type of scheme she has been in and whether she has ever had any personal pensions to go along side. The best thing to do is always to see a financial adviser and discuss your position. You shoudl suggest that to her.

Yes the tax is deducted under the following sections

Sec 143
Sec 246

And MVAT, Octroi, FBT and others are also possible as side transfer

Income from house property and tilllli is not taxable

You can buy horses. That will save you tax

You can also buy paintings or open and account in Assam Bank, India. No tax liability. Only 10% return

She can have part of the pot as a tax-free cash sum. The maximum is equivalent to 25% of the value of the fund, but the sums get complicated if it is a final salary scheme. The rest has to be taken as a taxable income for life. The fund itself is not taxable (apart from the Gordon Brown ACT grab) but what she takes out is.

She should get independent advice before she goes ahead. This is a difficult subject and she could lose out big time if she makes the wrong decision.

As her total pension fund is above 拢16,000 there will be certain tax implications. As she is being made redundant her HR department will be the best to advise her as to her entitlements.

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