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Tax on lump sum deferred state pension

Excluding a lump sum paid in 2011-12 on a deferred state pension, an individual has in 2011-12 total gross income of £10000 against which he has a personal allowance of £9940, leaving a balance of £60 taxable.  Consequently, taking that year in isolation, on those facts alone he is liable to tax at basic rate on the lump sum.  So far so good.

Q1: Had his circumstances been very slightly different than the above, in that he had also made a payment of £80 net (£100 gross) under gift aid in 2011-12, do all y'all agree that his marginal rate of tax would have been 0% (there would have been a small clawback of gift aid tax) and in consequence the rate of tax to be applied to the lump sum would have been 0%?

Q2: If you agree with my assertion in Q1, would a gift aid payment made in 2012-13 and carried back to 2011-12 be also effective in reducing the rate of tax applicable to the lump sum pension from 20% to 0%?


With kind regards

Clint Westwood


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08th Jun 2012 12:46

Don't sweat it.

Doesn't seem to work.

With kind regards

Clint Westwood

Thanks (1)