UK Pensions

Ivor the Engine said:

MSN

www.msn.com
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Yes, I can testify to that. For the past few years I have been receiving a tax rebate of nearly £1,000 each year. Yes, I have written to them (the Tax man) and made comments on their website, all to no avail. The good news, that rebate is usually paid each June. I am keeping my fingers crossed that the same will happen again this year.

My tax affairs are simple, 3 pensions and nothing else. The first pension is paid free of tax, the second pension is the State Pension always less than the personal allowance, and the third pension is subject to some tax. Should not be too difficult to get that right you say. However, while the website correctly shows the first pension as "No Tax Payable" on the tax calulation page it is included as taxable - hence the overpayment of tax. I am not complaining and the annual bonuse is always welcome. :) :) :)
 
nomad97 said:
Yes, I can testify to that. For the past few years I have been receiving a tax rebate of nearly £1,000 each year. Yes, I have written to them (the Tax man) and made comments on their website, all to no avail. The good news, that rebate is usually paid each June. I am keeping my fingers crossed that the same will happen again this year.

My tax affairs are simple, 3 pensions and nothing else. The first pension is paid free of tax, the second pension is the State Pension always less than the personal allowance, and the third pension is subject to some tax. Should not be too difficult to get that right you say. However, while the website correctly shows the first pension as "No Tax Payable" on the tax calulation page it is included as taxable - hence the overpayment of tax. I am not complaining and the annual bonuse is always welcome. :) :) :)
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I will be in a simular situation after my next birthday. Why is your first pension tax free?
If you don't mind me asking.??
My private pension is about the same amount as my personal allowance so when I draw a government pension, I am expecting to have to pay tax on all of it (I think)!
 
Ivor the Engine said:
I will be in a simular situation after my next birthday. Why is your first pension tax free?
If you don't mind me asking.??
My private pension is about the same amount as my personal allowance so when I draw a government pension, I am expecting to have to pay tax on all of it (I think)!
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My DWP pension is tax free because it's lower than the tax threshold (individual tax free allowance - £12,570 p.a.). My PPF pension is subject to tax at the current lowest rate (20% I think) for the amount over the tax free allowance having deducted the DWP pension.
 
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Yorky said:
My DWP pension is tax free because it's lower than the tax threshold (individual tax free allowance - £12,570 p.a.). My PPF pension is subject to tax at the current lowest rate (20% I think) for the amount over the tax free allowance having deducted the DWP pension.
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As I see it. Let's say both my DWP and PPF pensions are £10,000.00 p.a. each. My tax free allowance is £12,570.00 p.a. therefore I shall only be taxed on £20,000.00 less £12,570.00 p.a., i.e £7,430.00.
 
Yorky said:
As I see it. Let's say both my DWP and PPF pensions are £10,000.00 p.a. each. My tax free allowance is £12,570.00 p.a. therefore I shall only be taxed on £20,000.00 less £12,570.00 p.a., i.e £7,430.00.
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That is correct. There is not likely to be an increase in the Personal Allowance of £12,570 for several years. Tax is chargeable on all income including pensions derived from the UK. However it is deducted from either an occupational or private pension, and not from the DWP state pension.
In Yorky's example tax would be charged at 20% amounting to £1,486 per year and deducted from his PPF pension at around £123,80 per month

NOTE Where a taxpayer dies midway through the tax year 6th April -5th April, usually a tax rebate is claimable for the estate as tax has been deducted based on an annual amount payable, much of which is not eligible as the Personal Allowance comes into play first. Die near the end of the tax year and nothing comes back!
 
Prakhonchai Nick said:
That is correct. There is not likely to be an increase in the Personal Allowance of £12,570 for several years. Tax is chargeable on all income including pensions derived from the UK. However it is deducted from either an occupational or private pension, and not from the DWP state pension.
In Yorky's example tax would be charged at 20% amounting to £1,486 per year and deducted from his PPF pension at around £123,80 per month
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Should Gordon Brown (The Twat) have had half an ounce of mathematical knowledge then the tax would have been half that!

How he ever became Chancellor of the Exchequer, is a mystery to me.
 
Yorky said:
Should Gordon Brown (The Twat) have had half an ounce of mathematical knowledge then the tax would have been half that!

How he ever became Chancellor of the Exchequer, is a mystery to me.
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Not sure how anyones mathematical knowledge would have resulted in 50% less tax
 
Prakhonchai Nick said:
Not sure how anyones mathematical knowledge would have resulted in 50% less tax
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As a gesture to the poor he deleted the 10% lowest band and reduced the 22% band to 20% thereby making the poor better off - in his misguided opinion. Admitting his error, he awarded the affected around £60.00 p.m. "rebate" for 6 months. After that it was a case of "bugger you".

I was that soldier!

At least I was one of them.
 
Ivor the Engine said:
I will be in a simular situation after my next birthday. Why is your first pension tax free?
If you don't mind me asking.??
My private pension is about the same amount as my personal allowance so when I draw a government pension, I am expecting to have to pay tax on all of it (I think)!
Click to expand...
My first pension is tax-free or non-taxable, irrespective of any personal allowance. The reason for this is because the pension was earned wholly overseas when I was ordinarily non-resident for tax purposes. Although it is declared for tax purposes, it will never be subject to tax. It would be very nice if my other private pension was the same. However, it is not and is subject to tax. Fortunately, the £12,570 personal allowance covers my State pension of £6,084 (non-taxable) and leaves £6,486 personal allowance to be offset against my other pension. This goes along way to minimize my total tax liabilty.
 
Yorky said:
As a gesture to the poor he deleted the 10% lowest band and reduced the 22% band to 20% thereby making the poor better off - in his misguided opinion. Admitting his error, he awarded the affected around £60.00 p.m. "rebate" for 6 months. After that it was a case of "bugger you".

I was that soldier!

At least I was one of them.
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If you say so...I will investigate tomorrow.....pissed now :grinning:
 
Cent said:
After a certain age no pensions should be taxed (let's say 55 or 60). Social Security, work pensions and private pensions should be tax free income for the elderly. That would make it simple 'ey?

They want to tax you right up until you step into your grave, and even after.
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Death and taxes...... nothing so certain.
 
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