Tax on pensions.
Discussion
I’ve got my state pension and a couple of small private pensions.
Before I was just under the tax threshold but now of course due to the rise in the state pension I now find myself paying tax.
One pension is monthly and the other is 4 weekly. The monthly one is just in and there’s a few quid less than normal, presumably for tax. When the 4 weekly one comes in in a couple of weeks can I assume that that will also be reduced slightly because of tax now?
Do the various pension schemes work off a database or liase with the tax people? How do they know how much each is paying?
Simplistic questions I know but I’m curious.
In my case my main occupational pension provider has my tax code and they deduct the tax owed on that, my other pensions and state pension. Investment income is something else, depends how much, below allowance band or not. Mrs F is below, I'm not. Other income is either PAYE or self assessment.
Explanation is here.
https://www.gov.uk/tax-on-pension/how-your-tax-is-...
Explanation is here.
https://www.gov.uk/tax-on-pension/how-your-tax-is-...
I have a State pension and also a occupational pension. Most of all of my income tax is accounted for via the occupational pension and PAYE. So, my State pension is, as for everyone, paid gross, and my occupational pension pays all the tax I am due. I also do SA because of income from other sources, and any extra tax due is also dealt with via the occupational pension and PAYE, although I usually have a balance to pay after SA submission.
It may take a few months for HMRC to get the tax position sorted out once a person moves from being in employment and then being retired with pension income subject to tax.
R.
It may take a few months for HMRC to get the tax position sorted out once a person moves from being in employment and then being retired with pension income subject to tax.
R.
Another quick question, slightly more complicated.
Whilst I was working my wife transferred her allowance to me ( this will be £1260 for 24/25) as her wage was under the tax threshold.
Looking at our tax code notices this year including both our private pensions Mine is Personal Allowance + transfer of allowance - state pension gives me a tax free amount of £2345.
However my wife's is Personal allowance - transfer of allowance - state pension gives her a minus figure of -£175.
She has a private pension as well as me so we're both paying tax although she seems to be paying a lot more than me.
Now normally I'm assuming it wouldn't matter if both figures were a positive how the allowance was done as it would balance out, but does the fact that it's a minus figure mean she's paying more tax than necessary.
In a nutshell, if I stopped taking her allowance would it save any money as a couple or is it just shifting the total amount
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