The following Employment Tax guidance note Produced by Tolley in association with John Hayward provides comprehensive and up to date tax information covering:
Members of an occupational defined contribution scheme may take pension benefits in the form of a scheme pension, a lifetime annuity or in the form of income drawdown.
The pension is provided from the registered pension scheme or from an insurance company selected by the scheme administrator. A scheme pension may be guaranteed for a certain term not exceeding 10 years. So if the member dies before that term has ended, the scheme pension will continue to be paid regardless of the end of the guarantee period, but to another person or to the deceased’s estate. The 10-year maximum term-certain period runs from the date the member first becomes entitled to the scheme pension.
This is an annuity payable as a consequence of the annuity being secured through an insurance company which the scheme member has the opportunity to choose. This is an option, for example, for a member of a personal pension scheme. The 10-year maximum guaranteed period rule has been removed from annuities.
Members of defined contribution pension schemes can, since 6 April 2015, access any amount they require from a defined contribution scheme through flexi-access drawdown. Thus, if required, up to the entire pension fund may be taken from age 55 or later with UK tax payable at the individual’s marginal rate on the excess over the 25% ‘pension commencement lump sum’ (PCLS).
To access defined contribution pension funds (other than through buying an annuity or receiving a scheme pension), the member may either:
designate a flexi-access drawdown fund, from which any amount can be drawn down over whatever period chosen
take a single lump sum or a series of lump sums from uncrystallised f
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