Inheritance Tax from 2005

[Deleted User]

Thanks Jeremy…. Yes I get very similar figures although I put taxable income at £18600 not knowing that PC & PIP we’re not taxable. 

You have been more than helpful…

Jeremy535897

State pension is taxed on the amount accruing in the tax year (almost the same as what is paid, but there can be slight differences with 53 week years etc).

It will be necessary to register for self assessment. See https://www.gov.uk/register-for-self-assessment/not-self-employed

If no self assessment is required after the year of the gain, it is best to telephone HMRC to get it cancelled.

[Deleted User]

Do you consider Housing Benefit and Council Tax and a Freedom Bus Pass as ‘income’ strictly speaking for the purposes of tax consideration of income? 

Obviously having Housing benefit paid on your behalf saves you money that you would otherwise have to find. Also Housing benefit could be paid directly into your bank account and then you pay it to your Landlord as opposed to avoiding your bank account and being paid directly to the Landlord.

If I was asked personally, I would consider those three as part of total income because, if they were not paid, the individual would have to find the sums they represent and pay those sums. However from a strictly ‘useable’ finance position, only what is paid into their bank account that they can spend themselves could be seen as income. 

When filling in a form or application and asked “What is your annual income?” would someone list all their benefits including their bus pass or strictly only what is paid into their bank account for the purpose of total honesty and disclosure? You could see how the innocence of perspective of this question could lead to some accusing a person of not be honest or fully disclosing their position.

Jeremy535897

Council tax reductions, housing benefit and bus passes are irrelevant for tax purposes.