P60 & unemployed

xylophone

From http://www.welfarerights.net/benefits-guides/Incapacity-Benefit Income Tax:

Clients benefit will not be subject to Income Tax if they were in receipt of Invalidity Benefit prior to 13 April 1995.

For all others tax will only be due if the person's Incapacity Benefit and any other taxable income exceeds their tax allowance. Clients with other taxable income e.g. Occupational pension will receive gross Incapacity Benefit. Tax will be recovered by adjustment of the claimants tax code which is being applied to their other income.

It would appear that your mother is under 65 and therefore her personal allowance for the current tax year is £7475 http://www.hmrc.gov.uk/rates/it.htm
See also http://www.hmrc.gov.uk/tdsi/ten-per-cent-guidance.htm and read carefully to see whether this applies to your mother's situation.

She needs to contact HMRC to ask for advice as to her tax situation. She needs to know how the £10000 will be treated for tax purposes and also the funeral grant. The pension payers will also require her tax code.

It would also be as well if she contacted the benefits office to discuss her situation.

Nine_Lives

Could she just contact the banks to withdraw the R85s & be done with?

jennifernil

Yes, the banks deal with it for their own accounts, not HMRC.

Banks forward details of those registering R85s, HMRC could check a sample of them.

Nine_Lives

Cheers Jenn

Contacted Nationwide last night via the secure messages. AA savings were easy as you can just select to be paid net interest.

That leaves only TSB now, which unfortunately don't have a secure messages service, so phone or letter it is then.

jem16

K_P83 wrote: »

Would it be the pension provider or the tax office that would provide this information?
I wouldn't have thought it'd be the business of the pension adviser to tell you whether it's taxable income or not. I would've thought their sole job is to just give you the money??

The reason I'm saying you should speak to the pension provider is because there are different rules covering the death benefits of a pension which you should clarify with them. The lump sum payment may have already been taxed.

http://www.pensionsadvisoryservice.org.uk/personal-and-stakeholder-pensions/stakeholder-pension-schemes/death-benefits

What kind of pension was your dad's pension?

Nine_Lives

jem16 wrote: »

What kind of pension was your dad's pension?

TBH i don't know. I know it was through his work (national firm) & the paperwork we've (or rather my mum) has been getting has been from Capita Hartshead. That's about as much as i know i'm afraid.

xylophone

You do need to clarify your mother's tax position - Capita will need a tax code and you want to be able to check that it is correct.

Find out about how the lump sum and death benefit from Capita were treated for tax then contact your mother's tax office (Capita should be able to provide details).

It really is important to get this right - your mother doesn't want to be facing any problems with HMRC in the future.

jem16

K_P83 wrote: »

TBH i don't know. I know it was through his work (national firm) & the paperwork we've (or rather my mum) has been getting has been from Capita Hartshead. That's about as much as i know i'm afraid.

You really should find out then.

Nine_Lives

I remember she had letter regarding tax codes from Capita Hartshead:

https://forums.moneysavingexpert.com/discussion/3669471

K_P83 wrote: »

* Please note your pension will initially be taxed at Basic Rate. This will be amended once notification of your correct tax code is received from HMRC. (Received by who - is my question?)

K_P83 wrote: »

Anyway, she had a letter come through she told me, from this company dealing with these pension payments (Capita Heartshead) saying her tax code is 747L and that she'll be paying tax until her code is sorted out.

Nine_Lives

jem16 wrote: »

You really should find out then.

When you say "what kind" of pension did he have, what sort of keywords am i looking for when i look through the paperwork?