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01 September 2015
The tax treatment of a pension mis-selling compensation payment.
I have recently been awarded compensation of £21 000 from a firm of financial advisers. In 2013 this firm had wrongly advised me to transfer one of my private pensions into an annuity. The compensation came about as a result of the efforts of a firm that investigates mis-selling.
I tried to get the £21 000 paid into my annuity but because the payment was not paid by the original pension provider this has not been possible. Instead the money has been paid into my bank account.
It occurs to me that if the payment had been made into the annuity I could have received 25% of this as a tax-free lump sum and withdrawn the balance as a pension subject to a 20% tax charge. Instead if this payment is...
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