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Tax Free Pension

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Is there anyone out there that has a level three gallantry award? Are you aware that your military pension is tax exempt? My husband has the MC and has just found out about this - he is due to leave after his 22 yrs - but no-one else seems to be aware of this?? Is anyone else familiar with this?

Comments

  • molerat
    molerat Posts: 34,634 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I believe it is only the additional pension that comes with the award that is tax free and not the whole of his pension.
  • Hinnibell
    Hinnibell Posts: 19 Forumite
    Hi Molerat,

    I think that this was withdrawn in 1993. According to HMRC (who my husband has spoken to) it IS tax free.
    See http://www.hmrc.gov.uk/manuals/eimanual/EIM74307.htm

    It seems that the RBL, SPVA and the Forces Pension Society are not aware of this...
  • Hinnibell
    Hinnibell Posts: 19 Forumite
    EIM74307 - Pensions: particular occupations: armed forces: awards for bravery

    Section 638 ITEPA 2003

    Section 638 provides that no liability to income tax arises on a pension or annuity if it is paid to the holder of a specified award for bravery in respect of the award. The specified awards are –
    • the Victoria Cross
    • the George Cross
    • the Albert Medal
    • the Edward Medal
    • the Military Cross
    • the Distinguished Flying Cross
    • the Distinguished Conduct Medal
    • the Conspicuous Gallantry Medal
    • the Distinguished Service Medal
    • the Military Medal
    • the Distinguished Flying Medal
  • molerat
    molerat Posts: 34,634 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Your link above states exactly what I said ;)
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