Tax free allowance

cornishman_2

My wife recently received a pension in a lump sum as it was a smaller sum from a former job.   There was 25% tax free and the remaining amount was taxed at 20% flat income tax rate.   As my wife does not currently have any income or pension, being a housewife, would that remaining lump sum be eligible for the tax free income allowance for the year?  

Dazed_and_C0nfused

cornishman_2 said:

My wife recently received a pension in a lump sum as it was a smaller sum from a former job.   There was 25% tax free and the remaining amount was taxed at 20% flat income tax rate.   As my wife does not currently have any income or pension, being a housewife, would that remaining lump sum be eligible for the tax free income allowance for the year?  

She will have a Personal Allowance yes.  It will be either £11,310 or £12,570 depending on whether she has applied for Marriage Allowance.

20% tax is a little unusual in that situation but HMRC will automatically refund any overpaid tax later this summer.

Or she can make a claim if she wishes.  But whether they get round to dealing with her claim before it is automatically refunded is anyone's guess these days!

Also, being a housewife today isn't relevant, it is (taxable) income in the tax year as a whole that counts.