Tax on Pensions for pensioners


H

Harry Ward

I am 70 next year and have noticed that despite no longer working I am
still being taxed on my army pension and two small private pensions.
Could anyone please advise if this is correct. The pension I draw down
from the army is £484 per month and I also have old age state pension.

Regards

Harry
 
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R

Ronald Raygun

Harry said:
I am 70 next year and have noticed that despite no longer working I am
still being taxed on my army pension and two small private pensions.
Could anyone please advise if this is correct. The pension I draw down
from the army is £484 per month and I also have old age state pension.
Yes you should be paying income tax, because pension is income.
How much tax you should pay depends on how high all your income
is, from all your four pensions put together, plus any other sources,
such as interest from savings.

You will have a personal allowance of somewhere between £6610 (if
your income is less than £18,300) and £4615 (if your income is more
than £22,290), and you must pay tax in the normal way on everything
above that allowance.
 
D

David Floyd

Yes you should be paying income tax, because pension is income.
How much tax you should pay depends on how high all your income
is, from all your four pensions put together, plus any other sources,
such as interest from savings.

You will have a personal allowance of somewhere between £6610 (if
your income is less than £18,300) and £4615 (if your income is more
than £22,290), and you must pay tax in the normal way on everything
above that allowance.
Also since you may have been born before 6th April 1935, then if you are
married you may be entitled to Married Couple's Allowance.

DF
 
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A

Alec

Harry Ward said:
I am 70 next year and have noticed that despite no longer working I am
still being taxed on my army pension and two small private pensions.
Could anyone please advise if this is correct. The pension I draw down
from the army is £484 per month and I also have old age state pension.
As others have said, you are still liable for income tax if your pensions
and other sources of income (like interests) come to more than your
allowance. You may find that it looks as though your army and other private
pensions are taxed rather heavily. It's because your state pension is always
paid gross, but it's still taxable. So your tax office deducts the total tax
due from your other pensions. If you don't get a tax return, you can write
to your tax office quoting your NI number and they will give you a
computation of how your tax liability is worked out.

Alec
 

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