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Posted Mon, 06 Jan 2025 08:33:25 GMT by Chris Langton
I am currently receiving an occupational pension, my only income, and from April 2025 it will be more than my annual tax free alowance.
During the tax year, I propose to draw down a lump sum from a SIPP.
I have taken my tax free lump sum amount and this draw down will be subject to Income Tax.
When the drawdown is made, will this be considered by HMRC as a regular payment, thus affecting my ongoing pension payments adversely, or will it only be considered at an end of year self assessment?
Posted Wed, 15 Jan 2025 18:13:01 GMT by HMRC Admin 13 Response
Hi Chris Langton
The drawdown will be taxed on the Emergency Code initially please see Tax codes: Emergency tax codes.
Please speak to your provider to confirm the code that they will be operating at the commencement of the drawdown.
You should then review all of your income and look to have your code number changed to compliment this.
You can use:
• your personal tax account
• the official HMRC app 
Income Tax: general enquiries
to advise HMRC of your wishes.
If an incorrect code number is used then this will be reviewed at the end of a tax year.
You may find the information and examples used at this guidance helpful:

PTM062730 - Member benefits: pensions: drawdown pension rules applying from 6 April 2015: flexi-access drawdown fund - where member had not designated funds in an arrangement into a drawdown pension fund before 6 April 2015 - HMRC internal manual
Thank you

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