Paying tax on joint pension

needmoney

Hi have we any tax expert here please?


My husband and i parted in 1998 and we ahd an amicable arrangement we pooled our pesnions and split them down the middle. The whole amount was paid into my husband's bank account and hr then transferred half to me monthly. We have been paying tax on this eversince and the tax man said it's because it shows up as income for him. My husband now wants to have this paid directly to my bank rather than from his account thus lowering his income and hoping to free us from having to pay tax.

My question is if the tax man will accept this would we have a case for claiming back the tax we've paid as it was never my husband's income as he was paying it to me. I have paid this tax unquestioningly but only today had the reason for it explained. I asked my husband why the tax man would not accept that it was being paid to me and he said that as it was going to his account it was his taxable income. Had I known this before I would have argued the point, we are now going to do this but I thought perhaps someone here would know.

Just incase anyone was going to reply have spoken to tax office and it looks like there's no way around this.

Debt_Free_Chick

Unfortunately, the pension is HIS income. Effectively, he is paying you maintenance AFAIK there are no special tax concessions for payment of maintenance as that, too, has to be met from net income. But you might want to check that out.

You can't rearrange his pension either, as that's his entitlement from the pension scheme or pension plan.

Sorry, but I can't see a way around this. Any other MSEs see anything?

Rafter

How formal was this 'pooling' arrangement?

If your pot was less than his, and he simply made up the difference through this transfer through his bank account then you probably don't have a case, since the tax office havn't been advised of the revised split.

Unless you are in different tax bands, the net impact shouldn't be that significant. If however he is in the higher 40% band and paying some of his pension at this rate then you may be loosing out. Similarly if your own direct pension and state pension come in under the standard band limit.

I'd suggest if there is some benefit, you get the pension company to split the funds/ annuity so that it is taxed separately. Before doing this though you should consider the impact on the surviving partners pension when one of you dies. Presumably if you are separated and not divorsed you will get some sort of widdows pension from his pension?

Good luck.

R.