HMRC has updated its tax credits guidance to confirm that tax-free pension lump sums should not be included in the calculation of income for the purposes of tax credits claims and renewals. HMRC gives the following example:
Where a taxpayer’s pension is worth £60,000, they can take up to £15,000 as a tax-free lump sum. They do not need to include the tax-free £15,000 as income for tax credits purposes.
HMRC has updated its tax credits guidance to confirm that tax-free pension lump sums should not be included in the calculation of income for the purposes of tax credits claims and renewals. HMRC gives the following example:
Where a taxpayer’s pension is worth £60,000, they can take up to £15,000 as a tax-free lump sum. They do not need to include the tax-free £15,000 as income for tax credits purposes.
