UK taxpayers, especially state pensioners, face multiple tax charges on excess withdrawals from private pensions invested in Premium Bonds.
HMRC has warned UK taxpayers, particularly state pensioners, about potential tax implications when investing private pensions in Premium Bonds. A couple's inquiry revealed that excess withdrawals from private pensions could incur multiple tax charges. Tax-free allowances apply, with a £500 dividend allowance this tax year. Basic rate taxpayers face an 8.75% tax on excess dividends, while higher and additional rate taxpayers face 33.75% and 39.35%, respectively.
September 10, 2024
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