Armed Forces pension

Tax exemption?

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Hi, We have a client who received a military pension in addition to his self employment. He has received a letter from the pension provider stating "as you probably know Veterans UK have made your Armed Forces pension tax exempt from 20th October 2016".

How should this be reported on the tax return. It would appear this is a private agreement between Veterans UK and HMRC for individuals who have suffered injury etc from combat.

Thanks in advance.

 

Replies (8)

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RLI
By lionofludesch
14th Jan 2019 10:52

If it's exempt, it shouldn't be reported at all.

What does his P60 say ?

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Replying to lionofludesch:
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By littletosh
14th Jan 2019 11:06

P60 is a normal P60 with gross pay and tax deducted (and tax code).

White space declaration?

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RLI
By lionofludesch
14th Jan 2019 11:08

So how is it exempt ?

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By littletosh
14th Jan 2019 11:23

I believe as a result of being left disabled as a result of service.

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By lionofludesch
14th Jan 2019 11:31

Let me put the question another way.

If it's exempt, why is tax being deducted ?

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By lesley.barnes
14th Jan 2019 11:42

Perhaps the client needs to ask the pension provider why they are deducting tax and sending out a letter saying its tax exempt from October 2016.

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By littletosh
14th Jan 2019 11:50

The exemption letter was not sent until December 2018.

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By lionofludesch
14th Jan 2019 11:56

Ah well - that's part of the back story you didn't think it worth sharing with us.

I'd be asking HMRC what arrangements are being made to collect the tax overdeducted but, if I was in a rush to complete a 2018 return, I'd be entering Gross £0 and Tax £whatever in the pensions section. A white space note would indeed seem appropriate.

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