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Is a tax return required?

Practical Issues
Myfyr
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Is a tax return required?

#520287

Postby Myfyr » August 6th, 2022, 10:29 am

Quick tax question.

I moved some funds in excess of LTA into drawdown last tax year.

The provider correctly deducted 25% LTA charge.

I don’t currently have to submit a tax return.

Does this crystallisation mean that a self assessment tax return is required?

There is no higher rate tax to consider and my PAYE deductions are correct.

Thanks

DrBunsenHoneydew
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Re: Is a tax return required?

#520313

Postby DrBunsenHoneydew » August 6th, 2022, 12:58 pm

There are certainly boxes on the Tax Return to declare the excess amount and the tax paid by the scheme.
Whether you need to fill in a Return just for this if you didn't otherwise need to, I'm not sure.
HMRC say: The member is required to include their own liability to the charge on their personal Self-Assessment tax return. The member can claim a credit on their Self Assessment return for the tax paid by the scheme administrator. The scheme administrator will provide a notice confirming the rate of charge due and the amount paid by the scheme to help the individual do this.

chas49
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Re: Is a tax return required?

#520341

Postby chas49 » August 6th, 2022, 3:37 pm

I would say that if you haven't been given a notice to submit a return, and the amount in question have already been declared to HMRC and the proper tax has been paid, then there is no requirement for you to submit a return.

If you think there's a risk of being penalised for not declaring it yourself, you could write to HMRC with all the appropriate details.

Myfyr
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Re: Is a tax return required?

#521199

Postby Myfyr » August 9th, 2022, 10:36 pm

Just to finish off this thread, I contacted HMRC to put my mind at ease and for confirmation and was told I needed to complete a self assessment tax return in this scenario despite no additional tax being due.

Not a big job, so no big deal really.

Posting this detail here for information in case it is of use to others.


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