Army pensions - some should be paid tax-free

Savvy_Sue

I was listening to Radio 4's Fortune Hunters this morning, you should be able to Listen Again for a week.

As I understand it, if you were pensioned out of the army, eg through injury or illness which was attributable to your army service, your pension should be paid tax free. For some reason, although the navy and air force got this right, the army didn't and deducted tax at source. And they don't appear to have fallen over themselves to rectify this even when it's been pointed out to them.

This means that there are a fair few people who are owed a fair bit of tax, and there's still an argument going on over whether the interest on this should be compounded.

It sounded as if it would be possible to claim for those who've died as well, although obviously trawling back through their tax affairs may not be straightforward.

brianrhill

This link http://news.bbc.co.uk/1/hi/business/7785193.stm states that "The MoD say they have contacted all the ex-soldiers affected by the incorrect deductions, and consider the matter now resolved."

Savvy_Sue

Would I sound very cynical if I said "they would say that, wouldn't they?"

izzy339_2

I was medically discharged in 98 and my Mod Pension has been tax free since I first received it after my discharge.

Savvy_Sue

To be fair, from the programme, it seems that some of the problems started when the MOD were waiting for people to confirm they'd been medically discharged. Although you'd have thought they would have known that themselves.