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Pension on ill health grounds.....
fredandizzy
Posts: 1 Newbie
Is a pensions (ie NHS) taken through ill health grounds, tax free?
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Comments
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As far as I know ALL pensions are counted as income and therefore subject to tax.
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No it is not tax free unless it is under the personal allowance and the recipient has no other taxable income. It is however free of NI.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Depends on the severity of the ill health.
If the pension is fully commuted on the grounds of serious ill health (i.e. life expectancy no more than 12 months at the time the application is made - it can't be made once the pension is actually in payment), there is no tax payable if you are under the age of 75 and the lump sum is within your Lifetime Allowance.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0
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