Pension, savings and personal allowance help please.

xxdeebeexx

Hi I was given early retirement in August last year.

With the new Tax year I have a problem :-

My pension is under the Personal Allowance, but the interest on my lump sum will take me over the limit.

I have maxed out my cash ISA allowance.

I want to make sure that I get all my personal allowance, so how do I work out the interest on savings?

Do I register an R85 on some or all of my savings, or do I get my savings taxed and claim it back?

I don't really want to be in a position of having a tax bill to pay.
Any suggestions please?

tia

dx

jem16

xxdeebeexx wrote: »

Do I register an R85 on some or all of my savings, or do I get my savings taxed and claim it back?

You can't register an R85 if you know you will be a taxpayer. You will have to claim it back after the end of the tax year.

Some of your savings will be liable for 0% tax and some for 10%. Depending on amount of interest some may also be liable for 20% tax.

xxdeebeexx

jem16 wrote: »

You can't register an R85 if you know you will be a taxpayer. You will have to claim it back after the end of the tax year.

Some of your savings will be liable for 0% tax and some for 10%. Depending on amount of interest some may also be liable for 20% tax.

Thank you.

What info will I need to keep for the tax return?
I haven't completed one for at least 10 years!!

thanks

dx

jem16

xxdeebeexx wrote: »

Thank you.

What info will I need to keep for the tax return?

You won't need to do a tax return. Complete form R40 for the refund.

http://www.hmrc.gov.uk/forms/r40.pdf

Mikeyorks

Do you currently complete a Return? If not there's nothing in your post to suggest you need to.

Just make sure (State Pension still some way off?) your Code(810L) is all against your pension. And you complete an R40 after the year end to reclaim any tax on interest due back.

(Gosh - Jem's first again!)

xxdeebeexx

Mikeyorks wrote: »

Do you currently complete a Return? If not there's nothing in your post to suggest you need to.

Just make sure (State Pension still some way off?) your Code(810L) is all against your pension. And you complete an R40 after the year end to reclaim any tax on interest due back.

(Gosh - Jem's first again!)

Thanks,

I had a letter the other day to say that my tax code will be BR ??

Will I need to fill in a tax return for this year?

Income + pension = £11,719
Tax paid up until August 31st = £879.60
(only income has been taxed, pension hasn't)

tia

dx

CLAPTON

it would be easier if you gave the full details

for tax year 2011-12
how much was your salary
how much your pension
how much interest
how much tax did you pay
what was your tax code on the pension


for 2012
what will your pension be ?
what is the taxcode for your pension
how much interest do you expect to receive (excluding ISA)

Mikeyorks

Is the letter (P2?) relating to the pension and for 12/13? If so there's a problem that needs resolving - if that's your only income.

You had a P45 when you took early retirement? That should have gone to your pension provider in order to seam your employment and pension income together. Did it?

You need to contact HMRC and get this sorted out fairly quickly. A P46 through your pension provider is an alternative.

Income + pension = £11,719
Tax paid up until August 31st = £879.60

Can you clarify those figures? Is the £11719 to the year end and including the pension??

(Apart from my first 2 x paras ........ answering Claptons post will do the rest)

xxdeebeexx

for tax year 2011-12

how much was your salary £7514.57
how much your pension £4204.82
how much interest (not sure about interest but was taxed on it)
how much tax did you pay £879.60
what was your tax code on the pension I wasn't given a tax code for my pension. I finished work on 31st August and started pension in September 2011



The letter is a PAYE coding notice.... ok just read it again.
My pension comes from 2 different places. Most from TP but some from the Borough. BR is the Borough code and I will be taxed at 20% on this part.

dx

CLAPTON

did you not receive some sort of payslip with your pension or have you received a P60? the taxcode should be on them
but based on your income your tax for that year should be 848 ish


you haven't answered my questions about 2012-3

xxdeebeexx

CLAPTON wrote: »

did you not receive some sort of payslip with your pension or have you received a P60? the taxcode should be on them
but based on your income your tax for that year should be 848 ish


you haven't answered my questions about 2012-3

Hi, no P60 as yet. I got the figures from my p45 and by adding up the pension amount that has been put into my bank account.

My pension for 2012-3 will be £7291
Tax code ... no idea
Interest about about £1200


dx