TRICIA PHILLIPS
FINANCE EXPERT ANSWERS YOUR MONEY QUESTIONS
QMY DAUGHTER recently invested a sum of money in bitcoin on the advice of her accountant. It seems to have paid off. However, the investment broker has requested £4,000 be paid to cover capital gains tax before she can withdraw her funds. Is this right?
AYOUR daughter should be very wary of handing over any more cash. If she did owe capital gains tax on profit she made on bitcoin investments, she would pay it direct to the taxman herself – with the amount she owed based on whether she is a basic or higher-rate taxpayer, and on any gains above the capital gains tax allowance of £12,300.
If a financial firm was deducting tax at source, it would be taken from the existing funds with no need to pay more cash upfront.
QI’M STILL working and I pay tax on the pension income I receive on top of my wages. Will I still pay tax on my pension when I retire?
ATHAT will depend on your total income during retirement – including your state pension, plus any personal pensions. Anything above the £12,500 personal allowance will be taxed. Between £12,501 and £50,000 you pay 20% tax, £50,001 to £150,000 40% tax and over £150,000 the rate is 45%.
QI CASHED in a small pension at the end of the last financial year. Tax was deducted before I received it.
I have now found my tax code has changed and I’m paying a higher rate. How can I resolve this?
AYOU will need to contact your tax office if you have issues with your tax code. You should also check that you didn’t pay more tax than you needed to on the pension lump sum as these pension payments are often initially taxed at an emergency rate.
QI HAVE just over a year left on a five-year mortgage deal and I’ve found a new product with a rate that is 1.2% cheaper. Can I switch to this new product?
AIF YOUR current mortgage is a fixed-rate deal, then you usually have to pay an early redemption charge if you want to get out of the arrangement earlier than the end of the term, check with your lender what this charge will be as it does decrease over the term and you can work out if you may still be able to save money by switching. Make sure you include all of the fees attached to any new deal in your sums.
You can secure your next mortgage deal up to six months before your current deal ends.
QI SET up an ISA account last year but the rate is virtually non-existent. I’ve found another account with a slightly better rate. Can I switch existing funds into a new account?
AYOU can usually transfer funds into a new account. You just need to check the new ISA accepts transfers in. You will need to contact the provider of the new ISA and fill out a transfer form to move your account.
If you withdraw ISA funds without doing this, you will lose the ISA wrapper and not be able to invest that part of your ISA allowance again.