Is it possible to offset trading losses against pension income?
One of our self-employed pension policyholders is considering fully encashing his pension on the uncrystallised funds lump sum basis. Consequently 25% of the fund will be received tax-free but in normal circumstances the residual fund will be taxed at his highest marginal rate.
However our client’s trading business will make a significant trading loss this year. Is it possible for him to take his pension and in effect offset losses of up to £50 000 against that pension drawdown this year?
Thinking about it the taxable element of the pension will be more than £100 000. I suppose there may be an extra administrative charge but I am wondering whether he could split this in two and take half in 2015/16 and half in 2016/17.
If his trading losses exceed £50 000 I presume that I cannot carry forward the balance against next year’s pension...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.