markthree

4 minutes ago, SheungWan said:

No.

Let me quote off my latest HM Revenue and customs tax code notice. Note 2 .  State Pension.  This income is taxable but tax is not taken off the payments before they are paid to you. We use your tax-free allowance against your pension so you PAY TAX (my capitals)  on this. My code reads like this.  Personal allowance 12500. Total 12500. Less state pension 6737  Total tax-free amount  5763.                                                                                                              

10 minutes ago, SheungWan said:

State Pension is not taxed elsewhere or anywhere. It has an effect (obviously) on your personal allowance threshhold and tax liable on income from other sources.

So you end up paying tax on it in the final analysis.

It does not affect your personal allowance threshold.

9 hours ago, SheungWan said:

You are not taxed on 'it' at all (it being the State Pension). You are taxed on other income which exceeds the personal allowance. Let me give a simplified example: let us say for an example the personal tax allowance is 11000 pounds. If at the age of 64 your total income is 12000 pounds then you will be taxed on the 1000 in excess of the 11000. If at the age of 65 your income from other sources is the same at 12000 and in addition you now receive 5000 pounds State Pension, then assuming allowance is the same then your net income is now 17000 and you will be taxed on 6000 pounds of your other income. Note: State Pension is not taxed at source or liable to taxation at any point in this cycle. Taxation is purely on income from other sources. With State Pension, your allowance on income from other sources obviously goes down. Talking wishy-washy words eg "effectively" is a deflection and not correct.

SheungWan. Why are you agreeing with Spidey and myself and yet arguing that we are wrong???  UK State Pension is paid gross but taxed elsewhere if your total income is over the annual threshold. What have we said wrong???? What is your point???

Let's be clear on UK State pension. It is always paid without deduction of tax. BUT. It counts towards your annual income and if your total income is over the personal allowance ( in my case 12500 pounds ) then it is taxed by deduction from other incomes. So you receive your pension gross but you do pay tax on it.