Tax on Pension

bern494

Hi
Can anybody advise me, I have been told now I should not pay any tax on my private pensions.
I am on long term Incapacity benefit of approx £112 a week, plus my 2 pensions in total about £60 a week of which one of them I am taxed on. My tax code is 5430. I have been paying tax for approx 18 months on my second pension since I started receiving it.

I realise that my income is above the tax code threshold and should be paying tax but...

I have been told that because I have started receiving my incapacity prior to April 1995 (1994) I should not pay any tax on it, therefore my income drops below the taxable level.

Can anybody confirm this, if so how do I claim any tax back

bedazzled
Bernard

Torby

I'd be surprised, I was under the impression that once your income (all of it....and from any source) goes over the thresh hold you start to pay tax on it.....hopefully an expert will be along soon

ctm_2

If your current claim for Incapacity Benefit (Previously Invalidity Benefit) started before 13 April 1995, then it is not taxable, and so should not be included as a deduction in your tax code, or included in your total income when calculating tax due.

However, I don't think you are being taxed on yout IB. What is happening is that all of yor allowances are being set against one pension, but all the allowances are not utilised. Your 2nd pension is currently being taxed at BR (22%). What you need to do is call HMRC and ask for your spare allowances to be seta gainst your 2nd pension.

bern494

many thanks
I will get in touch with them

Bern