Pension: taxed twice.

[JumboBeef]

After some advice please.

A friend got divorced last year. Part of her settlement was a £10,000 share from her ex's pension.

She wanted to take the share out as cash.

The original pension company said she had to open up a pension with them in her own name for her to be able to withdraw the money.

So she did this. They moved the money across and deducted tax (think it was 20%). Which left around £8,000 in the pot. She then withdrew the money into her bank and they took more tax (another 20% I think) which left her with just over £6,000.

She is not a higher tax payer.

Is this right? Taxed twice?

Thanks.

[rsbmw]

I don't know if there's a provision for moving money from your pension into someone elses tax free, it would make some sense though that there was tax deducted when removing the money from the ex's pension pot, then again removing it from her pot.

[PurpleMoonlight]

rsbmw said:

I don't know if there's a provision for moving money from your pension into someone elses tax free, it would make some sense though that there was tax deducted when removing the money from the ex's pension pot, then again removing it from her pot.

There has been for 15 odd years now, it's called a Pension Sharing Order.

OP. this doesn't sound correct.

A authorised transfer would not incur a 20% charge. You need to clarify with your friend.

[JumboBeef]

Right, sorry for the waste of time.

The facts are a little different. The first deduction was Court costs and not tax. All sorted now.

Sorry again.