Pensioners and tax returns

UKSBD

My mother receives about £350 a week in state pension  and about another £50 a week from a small personal pension,

This obviously takes her over the tax threshold and she pays about 50% tax on her personal pension,

She has just received an anual interest statement from her non ISA savings of about £200.

I know she won't pay tax on this as it id below the £1,000 allowance, but does she have to declare it in any way.

Do pensioners who have income above the thresholds have to complete tax returns?

sheramber

The banks send details of untaxed interest paid. 

Pensioners do not need to complete tax returns  because they receive  taxable interest, unless they receive £10,000  taxable interest in the year.

A person may have to complete a tax return for other reasons.

Dazed_and_C0nfused

UKSBD said:

My mother receives about £350 a week in state pension  and about another £50 a week from a small personal pension,

This obviously takes her over the tax threshold and she pays about 50% tax on her personal pension,

She has just received an anual interest statement from her non ISA savings of about £200.

I know she won't pay tax on this as it id below the £1,000 allowance, but does she have to declare it in any way.

Do pensioners who have income above the thresholds have to complete tax returns?

If she hasn't previously received one she can now expect to start getting separate bills from HMRC to pay the extra tax she owes on her pension income.

She should receive a Simple Assessment calculation and the tax will be payable by 31 January after the end of each tax year (but always with a minimum of 3 months from when the calculation is issued).

The £200 interest will automatically be taken into account by HMRC but from what you have posted it will all be taxed at 0%.

UKSBD

thanks both

thegreenone

Your Mum's state pension is very high.  Does she have a Widows pension or other allowances on top?

UKSBD

thegreenone said:

Your Mum's state pension is very high.  Does she have a Widows pension or other allowances on top?

Have a read of this thread - https://forums.moneysavingexpert.com/discussion/6448642/what-happens-to-my-mum-when-dad-passes-state-and-private-pension/p1 

badmemory

If your figures are correct I think she may have got a K code for this year & I don't think that will pay all the tax due.  I will try to explain.

State pension approx £18000 a year

Private pension approx £2600 a year

Total £20600 less personal allowance leaves £8030 taxable meaning that tax due is about £1600.

And that is where it is so different to most people who are employed or with a pension.  It does not matter what her tax code they cannot take more than half of that income in tax.  That would mean she would still owe £300 in tax but that will not be due for payment until almost 10 months from the end of the tax year & they will do a simple assessment, so no form filling.

Actually on thinking about it I believe she has been dealing with a K code for some years but I will the explanation in case someone else is interested.

UKSBD

I think her state pension is higher than I initially said and her private pension is lower.

If so, that would make her owe more, as 50% of her private pension will be a long way short.

I've told her to expect a bill between £800 and a £1,000 for last year.