I had a son later than usual I am 58 in a couple of months he is 7. I can retire in a couple of years and get my work pension, I know I will have to continue to pay but on a lower sum to what I pay at the moment. But what I cant seem to get out of the child maintenance service is can my sons mother attack the tax free lump sum I will get? anyone know please
to the best of my knowledge, child maintenance is against taxable income only, so the tax free lump sum should be exempt, though if it's over about £60k, it could then be an asset that is then liable to be assessed. However, I'm not 100% on this so it may be worth finding a professional financial adviser who can help you on this (possibly one who knows the CSA or CMS) who can both answer the question, and if the above is correct, find the relevant regulation or get in writing from the relevant authority - although it may cost you to do so, it could save you a lot in the long run.
The various rules around tax and pensions and lump sums depend on a number of factors.
1. A lump sum (from electing to receive a slightly reduced pension as a lump sum "early") on medical grounds is "tax-free" and not used as "income" from CMS purposes.
2. A lump sum from a private pension is not counted as income - as long as the lump sum is below the 25% of pension value limit.
You best bet would be to call a "pensions helpline" (for your provider) as this is really a tax/income/accounting questions - and one you are not likely to get an answer from CMS on.
For more details on what is / is not taxable income, you can take a look here (but for a conclusive answer you are best calling your provider, or Pension advisory service
I took a cash lump sum of £9,300 from an old pension. This was deemed taxable. Pension was accrued between 1971 and 1980, 23 years before marrying my daughters mother and 20 years before my daughters birth. This one-off lump sum has been included in my child maintenance assessment, increasing my weekly payments by around £23. Can I appeal?
Thanks I never thought the lump sum would affect my CM calculation. Spent a wee bit of this on my daughter. I should have left the money in the pension pot till after my daughter left FT education. BEWARE!