I did not know pension providers would ignore even an NT tax code. But I suppose it is consistent in that on a first taxable withdrawal that is taxable from a pension pot, HMRC applies emergency tax. So emergency tax is taken the moment you withdraw any taxable amount from a pot, such as from the 26th percentile of a pot value. But not when you withdraw from any of the first 25 percentiles ie the first 25% which as far as the pot is concerned, is taxfree.
There are 2 important things about this.
(1)After emergency tax has been taken you need to fill out one of 3 variations of a particular HMRC form to request it back. People can submit the form immediately but I gather it can take months and months to get the overpayment back.
(2) Worse, from what I gather HMRC takes even more emergency tax than you would think because their sums for this treat what you took out as indicative of your earnings per month and tax it as though you earned the amount that indicates for the rest of the tax year… or something equally barmy and unfair.
The finance industry has asked the government for HMRC not to do this. But for some strange reason this continues.
I wonder if the following might work.
Get your NT tax form done as early as you can. For the pension pot, also submit the France Individual tax form (if HMRC will take it)
A couple of posters on here, of whom I think @SuePJ was one? have warned HMRC will overtax now if this isn’t submitted for each new source of ‘income’.
Do what a financial adviser might suggest, this is done to.avoid the emergency tax over-taking. As follows:
Make a first withdrawal of £1 or £100 - whatever is the minimum allowed by pot rules. No you don’t have to take the full 25% taxfree just take the absolute minimum token withdrawal.
The first withdrawal from a pot automatically triggers HMRC to issue a tax code to the pot. I understand it’s currently issued in two weeks or so. Later withdrawals are then not subject to emergency tax. .Typically I gather later withdrawals are forced by HMRC to be taxed at basic tax rate by the provider, which is currently 20%. The person withdrawing then accounts for that on their annual tax return either claiming back an overpayment for it or paying extra tax owed if the rest of income plus the withdrawal would take them into a higher tax bracket.
I don’t know if doing the France NT form and then trying to do a France Individual form for the pot before any withdrawal will mean that after a token withdrawal to trigger a tax code issue for the pot, any later withdrawals (in your case, all the rest of it) would not be taxed or if you’d still be taxed at 20% and then be expected to apply to HMRC for the return of the overpayment. But you’d avoid the emergency tax overpayment from the 2nd withdrawal, provided the tax code had arrived.
If Std Life won’t agree to let you do a token first withdrawal (this strategy is not unusual) then personally I’d look at transferring it to a provider who will assist and accessing it from a new provider. As and when you take the pot make sure you have an S1 to keep it to the 6.75% net if you’re going that route.
Personally I can only see tougher tax rules coming in both countries so I’d do each step as soon as I could.
I’m absolutely not an expert but picked this up in the financial press and hoping others on here who do know more will chip in.