Service Invaliding Pension

internationalhardman

I was recently discharged from the RN for medical reasons and received my tax free lump sum no problem. I am now in receipt of my monthly payments but as I am working full time also the Inland Revenue want to tax me 20%.

At first I thought this was ok but then some of my friends said that it was money I had already paid tax on... so is it right that they tax me or not? Anyone else out there in the same boat as me?

Trying_to_be_good

If it's a AFPS pension payment, it's taxable (and will be taxed at BR, basic rate, if you're also earning elsewhere and using your personal allwoance against that other income). It's all classed as income, whether it's from a pension, bank interest or from pay in employment. The only exception for ex-military folk is the injury/compensation payments, from the Compensation Scheme (AFCS), which can be (or maybe always are, I'm not sure) tax-free - someone who knows more will be along when the sun's up.

Best of luck in the outside world!

System

If it is a Service Attributable Pension as opposed to a standard pension then this might be tax-free.
http://www.veterans-uk.com/pensions/afcs.html gives more info about pensions/compensation

ICATQ

Are you getting a medical pension? If so then this is tax free.

boomboy

It comes down to when the boarding condition occurred first. If it occurred before Apr 2005 then it will come under War Pension Scheme = Tax Free. If the boarding condition occured post Apr 2005 then pension is taxable unless you qualify under AFCS for a one off award under the scheme i.e your boarding conditon was attributable to service. The forms that you filled out prior to your medical board go to SPVA so that they can make a decision whether you qualify for AFCS payment and therefore tax free pension.

I have within that last few months been med discharged and that is what my understanding of it is.

All the best.

internationalhardman

Boomboy... thanks for the explanation... I knew I had read that somewhere. I am correctly paying tax on my SIP.

Thanks for all the other replies folks

Boomboy, knuckle down and get yourself sorted... I am now much much better off than I was in the RN... it is possible.

baby-mechanic

Same as youself, I was invalided out of the RN, and at 20%, but have never had my monthly monies received taxed in any way.

They tried to tax me when we moved here to IOM, but a very supportive War Pensions Department here on the Island spoke to the tax office, and cleared it up straight away.

Maybe worthwhile chatting to the folks at Norcross, would have thought they've had this question many times. Always been very helpful when I ever needed to chat with them.