Income Tax on 84 year olds Pension when terminally ill

KittyMac

Hi

Can I ask if I need to check with HMRC if Mum should be paying income tax on her state and private pension income when she is in a care home (self-funded) with an incurable cancer and severe dementia? She has been there for two years when we expected months and may well out live us all nobody knows.

unforeseen

If the total exceeds the personal tax allowance then yes. Unfortunately there is no waiver for the terminally ill

Brie

Sorry to hear about your mom's circumstances.  But, no, no tax relief that I'm aware of.

SVaz

Is her private pension income from a DB fund (guaranteed income)  an annuity she bought or drawn from a personal pension made up of investments?
For the latter she could have bought a care needs annuity and it would have gone to the care provider tax free.  

Imo,  any income going to care needs ought to be tax free, especially when you consider that some of it will be taxed at 40%,  given the high cost of care.
If they can do it for a care needs annuity,  why not for everything? 

Pat38493

Well yes - but shouldn't HMRC be taking care of this automatically on their side - I thought that they had a system to collect the tax against the private pension in these type of situations without having to be proactively contacted?

Dazed_and_C0nfused

Pat38493 said:

Well yes - but shouldn't HMRC be taking care of this automatically on their side - I thought that they had a system to collect the tax against the private pension in these type of situations without having to be proactively contacted?

What has made you think this isn't happening?

Pat38493

Dazed_and_C0nfused said:

Pat38493 said:

Well yes - but shouldn't HMRC be taking care of this automatically on their side - I thought that they had a system to collect the tax against the private pension in these type of situations without having to be proactively contacted?

What has made you think this isn't happening?

The original OP question was whether they need to inform HMRC about it.  To my understanding, the answer should be no, because HMRC will already be aware of the pension income and the state pension and they will issue a relevant tax code to collect the tax from the person’s personal pension?

Therefore the answer to the OP question is no?  Other responses didn’t seem to specifically answer this and assumed the OP was asking if there was an exemption for terminal ill people.

Dazed_and_C0nfused

Can I ask if I need to check with HMRC if Mum should be paying income tax on her state and private pension income when she is in a care home

I clearly interpreted that differently, taking it as a question about whether her mum could stop paying the tax she was already paying

badmemory

If she is self funding is she claiming attendance allowance.  I believe you can't claim if you are LA funded.

MarkCarnage

Dazed_and_C0nfused said:

Can I ask if I need to check with HMRC if Mum should be paying income tax on her state and private pension income when she is in a care home

I clearly interpreted that differently, taking it as a question about whether her mum could stop paying the tax she was already paying

Think the wording was ambiguous and open to both interpretations.

KittyMac

Thank you, everyone - sorry for the confusion in question. Mum is paying her tax, deducted by the Pension Company. I had read somewhere that when someone was terminally ill then tax on pension could have some relief.