pension help

nikspiks

Can you help me
my mum is 82, 83 in August and her tax code is 76Y, she is in receipt of the state pension and a small private pension of about 4000.

The tax office insists this code is right although this means her tax free allowance is only 760 a year and she therefore pays 20% on most of her income (I know her pension is taxable).

This seems too much but nobody seems to want to know to give her the guidance she needs.

Thrugelmir

State pension is paid gross. So this will utilise a proportion of personal allowance. Do you know how much this is per annum?

jem16

nikspiks wrote: »

The tax office insists this code is right although this means her tax free allowance is only 760 a year and she therefore pays 20% on most of her income (I know her pension is taxable).

If she is receiving £9900pa state pension then yes it's correct.

The way the tax code works with a state pension in your Mum's case is £10,660 personal allowance minus £9900 state pension which leaves £760. You drop the last digit and that becomes a tax code of 76 - the Y on the end is the tax code for people over 75.

State pension is also taxable but is paid with no tax taken off. Any tax due would be taken through private pension income hence why the tax code is lowered.

mgdavid

how much is her State pension?
Did she receive a Notice of Coding this time last year? as that will explain how they've calculated the code.

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293961/8073_The_starting_rate_of_tax_on_savings_Budget_2014_Final_v1.0.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf


The tax free allowance for a person of her age will be £10660.