Q: Assuming a member turns 59 on the 9th of May 2023, and sets up a full pension fund to commence from 1 July this year (2023) shortly, when that member withdraws the lump sum before the 9th of May 2024 (next year), aged then 60, is the lump sum subject to tax or not?
A: The individual who’s looking to access the money is aged 59. So, they are below age 60 and therefore there can be a difference in tax compared to someone who was over age 60. So, what we can assume here is the individual has retired at age 59, otherwise they wouldn’t be able to access a full pension. It would have to be a transition to retirement pension.
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