Thank you all, I will sit down with her and go through it all.
Apparently it's an annuity pension, I've just found out, and apparently she has received a tax code like 2 days ago (all stuff you don't get told ) so her pension provider just have to update their records when they receive notification and all should be well by my reckoning. Thank you all for your advice.
-- Edited by Rhianrach on Saturday 27th of April 2013 07:06:21 PM
-- Edited by Rhianrach on Saturday 27th of April 2013 07:21:34 PM
My Mum has a state pension that brings in £7280 pa. She also has a private pension that at the moment brings in £1056 pa. Is it right that she is taxed 20% on her private pension across the board even though the income combined is below her personal allowance?
no, not unless her personal alowance has been reduced for some reason or she has savings income not mentioned in the question?
From the sound of it though she should not be paying tax at all.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Is there any interest, dividend or any other income received, Steve? This is where you tell me about the yacht that she lets out in Marbella lol
Some or all of any interest received may be liable at 10%, depending how much. This is certainly worth telephoning HMRC about and presumably she is being taxed more than previously.
Have a look at the coding notice for the private pension - this will be the major clue as to what the Revenue are doing.
Is she over 65? Then her tax free allowance this year is frozen at last years amount of £10,500.
Ok it appears that the second pension isn't a pension. She was advised to not get a pension as yet for a couple of years for whatever reason so she is using the lump sum as an income through a savings account. Apart from that she isn't receiving any other income, and any savings are in ISA's for now.
but regardless of anything else if she is receiving less than her personal allowance from any and all sources then she should not be paying tax on it.
I'm confused, is the lump sum in an ISA (so tax free at source) or is the ISA's line in relation to other savings?
If what she is actually saying is that she is paying tax at source on non ISA savings then she is due a refund on overpaid tax (assuming that her tax code has not been adjusted down for any reason).
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
She received money from a will, she has dumped as much of that as possible in ISA's, (she has never had money and doesn't really know what to do with it). The rest is in a normal savings account along with a lump sum from her private pension and I assume it would be taxed at source, however I'm not very clued up on how banks work. The rest of the pension funds haven't been put in to an annuity as yet so there is no income from that. I need to sit down with her really and take a look at where everything is, but I'm reasonably certain her income generated from all sources should be below the allowance.
) so her pension provider just have to update their records when they receive notification and all should be well by my reckoning. Thank you all for your advice.
