Silver Surfers Cheshire

17 www.silverlivingmagazine.co.uk HMRC’s most recent statistics, to the end of March 2019, show that 1,113,000 people have withdrawn more than £25,600m from their pensions, across 6,136,000 payments. The amounts withdrawn and the number of payments have both increased each tax year since the ‘freedom’ rules were introduced. In 2018/19 there were over 2,400,000 payments totalling £8,180m. However, the system is causing some Pension flexibility proves taxing BY CHRIS WATSON, TAX ASSOCIATE AT WNJ CHARTERED ACCOUNTANTS LUMP sum withdrawals under pension flexibility rules are resulting in over-paid tax as a result of the use of emergency tax codes, it has been revealed. So if you are thinking about using pension flexibility, it really pays to take advice before asking for the payment. Recent statistics from the taxman have highlighted the over-taxation of some pension benefits. More than a million people have received flexible pension payments thanks to the rules introduced just over four years ago. problems for HMRC. In the first quarter of 2019 HMRC refunded £31.1m of overpaid tax to more than 12,500 people. And it has also emerged that it has given back more than £433m to taxpayers since the introduction of the pension freedoms. The over-collection is a result of HMRC’s insistence on using emergency tax codes where a pension provider does not have a current tax code for the individual, which is usually the case on a first withdrawal. More often than not, emergency tax codes create too high a deduction. The excess tax can be reclaimed and HMRC has created dedicated forms to speed up the repayment process. In theory if no reclaim is made, the tax should eventually be refunded once HMRC undertakes its end of year reconciliation – but that could mean waiting more than 12 months if the payment is taken early in the tax year. In some circumstances the emergency code issue can be sidestepped, but if it cannot, then you need to be aware of what you will receive initially and the process of reclaiming what you’re owed. There have been growing calls for the policy to be changed; however, last June, HMRC said it had been reviewing the process for flexible pension drawdown payments, but it had concluded “that any changes at the current time would not significantly improve the tax position for the majority of recipients of a flexible drawdown payment, when compared to the process currently in place”. HOMEOWNERS aged 55 and over released nearly £4 billion from their homes in 2018, according to the latest quarterly lending figures¹ from the Equity Release Council. Long-term increases in the nation’s house prices mean that for many homeowners, their home represents a substantial financial asset. Accessing this wealth could help you improve your finances using a specialist mortgage, known as a Lifetime Mortgage, specifically designed for the over 55s. Lifetime Mortgages are the perfect way to unlock this wealth. Many people are enjoying their tax-free wealth for dream holidays, home improvements, mortgage repayment, and increasingly, using money to gift early inheritances to family. Can I keep ownership of my home? Your home remains your own for life. The mortgage, plus the interest accrued, only gets repaid at the end of your lifetime, or going into long term care. Can I release equity from my home if I have an outstanding mortgage? You can still release equity from your home if you have an outstanding mortgage, provided you can clear the outstanding mortgage balance on completion of your plan. Do I have to pay tax on the money? The money you release from your home is tax- free. Can I end up owing more than the value of my home? The Equity Release Council’s ‘No Negative Equity Guarantee’ ensures that your estate will never owe more than the value of your property for your peace of mind. Equity Release – The Facts: Must I make monthly repayments? Despite the name, a lifetime mortgage requires no mandatory payments. However, should you wish, many plans allow you to make voluntary payments. Your local, trusted expert will guide you through all your options. Specialist Paul Murphy will provide you with a free initial review and expert, clear advice with a first-class customer service. Seeking professional advice and a personal illustration is important, as taking advantage of your property wealth today could reduce the amount available for you and your estate in time. Receiving a tax-free cash injection could also affect your entitlement to means-tested state benefits. Plans are available that allow you to mitigate these impacts, which Paul will explain to ensure you are aware of all your options. Paul has over ten year’s industry expertise and knowledge. As a trusted name in the industry, Paul works with banks and accountants advising on lifetime mortgages. To find out if a Lifetime Mortgage could transform your finances, contact Paul Murphy today on 07816 061 170 for a no- obligation review. 1 Equity Release Council Spring Marketing Report 2019. Responsible Equity Release is a trading style of Responsible Life Limited. Only if your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490.