The self assessment sheet has a state pension figure provided by DWP of £7,150, being £137.50 X 52. During 2012 DWP corrected a mistake and reduced pension to £130.25 pw but did not claw back overpayment. HMRC say that tax is payable on pension due, not on pension received. Pension received £132.5 * 4 + £137.5 * 36 + £130.25 * 12 = £7,043. Pension due was thus £130.25 * 52 = £6,773, but received £7,043. What amount is taxable?
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Assessable income from Pensions
I believe the legislation is The Income Tax (Earnings & Pensions) Act 2003 and in Ss 570 & 571 it states (my bold/underscore) - "
S 570 Pension: interpretation
In this Chapter pensions includes a pension which is paid voluntarily or is capable of being discontinued.
S 571Taxable pension income
If section 569 applies, the taxable pension income for a tax year is the full amount of the pension accruing in that year irrespective of when any amount is actually paid.
I hope this is helpful