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Posted Sun, 03 Mar 2024 14:39:48 GMT by N M
I have been told that I am being made redundant in June. My current salary is £42000 so I am a 20% rate tax payer. My severance payment will be around £58000 which I will receive on my final payday. I will still be employed by them when the payment is made. I understand the first £30000 of the severance payment is tax free. How is the remaining £28000 taxed? I've been given conflicting information, one is saying that the first £3730 would be taxed at 20% and the remaining £24270 would be taxed at 40% and the other is saying that it will all be taxed at 20%, which is right? There won't be any PILON or holiday in my final pay, it will be my usual monthly salary plus the £58000 severance payment.
Posted Wed, 06 Mar 2024 06:47:10 GMT by HMRC Admin 25 Response
Hi NewIslington M,
Your employer will add the redundancy pay minus the tax free amount to your pay and calculate the tax payable.
They will deduct the tax from your redundanct payment.
Your employer shoud include these figures in your P45. so that you can give the P45(1) to a new employer or claim a repayment after the tax year has ended.
Thank you. 
Posted Wed, 06 Mar 2024 06:49:22 GMT by HMRC Admin 25 Response
Hi San CA,
If you choose to use the remittance basis, you are taxed on your UK income and capital gains along with any remitted income and capital gains.
If you dispose of this property and bring the proceeds to the UK, the proceeds will be taxable under capital gains rules and would need to be declared on a Self Assessment tax return.
You would need SA100 (tax return) SA108 (capital gains) SA106 (foreign) and SA109 (residence, domicile and remittance) along with any other supplementary pages.
Please note that by using the remittance basis, you lose your personal allowance and capital gains allowance.
Have a look at section 9 of:
Residence, domicile and the remittance basis: RDR1
For more information.
Thank you. 

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