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Posted Thu, 19 Dec 2024 00:10:01 GMT by Malcy Graham
In the Pensions Taxation Manual (PTM177000) it states "The payment of a pension commencement excess lump sum will always be subject to income tax at the recipient's marginal rate." I retired on 8th April 2024 and received a PCELS in excess of the amount of the Top Rate of income tax. As I live in Scotland this PCELS was taxed in it's entirety at a rate of 48% by my pension provider. In essence it appears this was treated as recurring income, which it is not. As I had not earned any other income at the point this was paid in 2024, should I not have been afforded the benefit of it being taxed through the various bands, arriving at the marginal rate of 48% only for that portion which fell into the income band over the top rate amount?
Posted Mon, 30 Dec 2024 11:28:39 GMT by HMRC Admin 32 Response
Hi,
Please submit a form P53 to claim back any excess tax decucted from your lump sum.
Claim a tax refund when you've taken a small pension lump sum (P53)
Thank you.

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