Child's Pension Taxable?

tatusmaru

Hi there,

I am, and have been a full time student and had been in receipt of a child's pension up until my 25th birthday in September 2011. I have recently been sent a letter from HMRC asking for a P60 for the tax year ending April 2011 to check that I have paid the right amount of tax. All of my old correspondence with the pension company states I have paid no tax.

Can a full time student be taxed on a child's pension? It worked out as around £360 per month.

Thanks.

rpc

Being a student (or a child) has no bearing on whether you pay tax or not.

If your income exceeded the tax free allowance, you will pay tax. If that was your only income for the year (e.g. no summer job) then you will come below the threshold but you still need to prove that to HMRC.

Tax free allowance for 2010-11 was £6475.

Andy_L

Pension income is subject to income tax. However £360/mth is well below your personal tax allowance so, unless you have any other taxable income, no tax would be due

tatusmaru

Thanks.

I did work over the summer, so looks like I will be paying some tax.

Panicked for a while. I didn't realise there were thresholds on how much you could earn before getting taxed, I was always under the assumption you were exempt whilst in full-time education.

To make things worse, once I found out, I then thought you were taxed based on all income if you went over the threshold, and didn't realise you were only taxed on the amount over the threshold. It's not too bad. Will work out about £264, but doesn't help when you're in your final year with a wife and two kids! Christmas is off this year I think.

Thanks for the help!

xylophone

http://www.hmrc.gov.uk/incometax/basics.htm

kidmugsy

Well that's you told, xylophone! No good turn goes unstoned.

westy22

I didn't realise there were thresholds on how much you could earn before getting taxed

I then thought you were taxed based on all income if you went over the threshold

Sounds to me like you need to read through xylophone's useful link as you clearly didn't know even the basics!