Tax on pension

J_B

Mother in law is 90 - was living alone but currently in a care home (not sure if it's temporary or permanent). She owns her own house worth 300k 🤷‍♂️

Father in law died a couple of years ago

She gets 1k+ state pension every 4 weeks as well as 450 from her work pension and 425 from his work pension. fiver a month interest on her current account and 1k p.a. on her savings a/c

Does she need to declare and pay tax?

If so …. where do we start?

flaneurs_lobster

Is she not already on PAYE, with any deductions coming from the work pension(s) via tax code? Are there payslips?

Marcon

https://forums.moneysavingexpert.com/discussion/6652377/tax-on-pension

The two private pension providers should have the relevant tax codes direct from HMRC, with any tax being deducted from one or both pensions as appropriate. Your MIL should get a payslip from each of them at least once a year, which will have the tax code shown - or it'll be on the P60 each provider will issue shortly after the end of a tax year. From what you've said, there's nothing you need to do.

xylophone

I'm afraid I find the new "intuitive" text editor far from intuitive.

Why oh why can't they leave well enough alone?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81856199#Comment_81856199

Perhaps it just a precursor to letting AI answer all the questions .

Intoodeep

https://forums.moneysavingexpert.com/discussion/comment/81856220#Comment_81856220

I sincerely hope not.

xylophone

Regarding hope, my late mother used to say. "You know what hope did…."

I didn't, but I have a feeling that whatever it was boded no good……

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/81856199#Comment_81856199

The old one was broken (especially when you multi-quoted). I am reserving my opinion at the moment, as it may just be memory muscle that needs to adapt. Image pasting is better with this new one.

edit: noting the difference in layout between the two quote methods.

Does she need to declare and pay tax?

If so …. where do we start?

She has PAYE on two incomes. So, nothing needs to be done in respect of income tax (based on the info you have given). Interest should be handled automatically.

J_B

«She has PAYE on two incomes. So, nothing needs to be done in respect of income tax (based on the info you have given). Interest should be handled automatically.»

We've found a letter from FAS who were Father in Law's pension provider. It said something along the lines of "we're transferring it to you after we've deducted tax" so presumably that means no further action is needed?

dunstonh

We've found a letter from FAS who were Father in Law's pension provider. It said something along the lines of "we're transferring it to you after we've deducted tax" so presumably that means no further action is needed?

It depends. If he died before age 75, then there is no tax (caveats apply). If he died after 75 and she is taking it as a lump sum payment, then it will be taxable but it may not taxed correctly. HMRC will pick up on that and refund or bill at a later date (usually later in the following tax year). If the tax is wrong, it is possible to get it corrected in this tax year with the appropriate form.

J_B

https://forums.moneysavingexpert.com/discussion/comment/81856955#Comment_81856955

He died aged 92 (?) and the payments arrive monthly ……