UK company pension taxation

[tutsiwarrior]

I receive a company pension from a pension fund in the UK for which I am issued a form P3238 from the pension fund...I note that from month to month the tax code is all over the place, sometimes 15%, sometimes as much as 50% and once a previously deducted amount was refunded...

 

I am told by a pension fund rep that the yearly non taxable allowance is GBP10000 and my pension is less than that...can I expect the tax code to normalise and for all previously deducted amounts to be refunded or is this the usual way for the inland revenue to do business?

 

thanks in advance...

[steve187]

have you been issued a 'notice of coding' do you have any other UK income

 

tax allowance for 2016/2017 is £11,000

Edited February 28, 2017 by steve187

[lungbing]

Your pension fund rep is wrong.  The allowance is currently  11,000 GBP.  Anything you receive  over that, upto 43,000,  is taxed at 20%.   The UK state pension is taxable, but is paid without tax being stopped.  The tax code on your company pension is changed to include both the tax due on your state pension and your company pension.  It should not fluctuate unless your pension does.  You may be on emergency code  and if so find out why via your tax office and get it sorted.  I suspect, but do not know for sure, that if they owe you a lot of money you will get a refund.   If it's only a little money they will adjust your code to refund the money.

[Flustered]

Just received my notice for 2017 to 2018

 

Personal allowance.....£11,500

Less State pension......£7425

Total tax free amount..£4075

 

Company pension.......407L (Means pay basic tax after £4075)

Private pensions..........BR (basic rate tax)

 

 

And that's how it should work

[tutsiwarrior]

thanks for the replies...I'm not a british subject so I don't receive a state pension...but, whatever, they are deducting tax when they shouldn't...

 

I haven't lived in the UK since 1998 and I'm a US citizen...any suggestions as to which agency to contact to rectify the situation? hopefully to avoid the inconvenience of traditional snail mail formal correspondence...

[Flustered]

4 minutes ago, tutsiwarrior said:

thanks for the replies...I'm not a british subject so I don't receive a state pension...but, whatever, they are deducting tax when they shouldn't...

 

I haven't lived in the UK since 1998 and I'm a US citizen...any suggestions as to which agency to contact to rectify the situation? hopefully to avoid the inconvenience of traditional snail mail formal correspondence...

It's always dodgy contacting any Inland Revenue department as they always end up claiming money from you. Bloody leeches.

 

In this case however, you would probably be best to contact the following and ask for guidance.

 

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/pension-scheme-enquiries

[tutsiwarrior]

Just now, Flustered said:

It's always dodgy contacting any Inland Revenue department as they always end up claiming money from you. Bloody leeches.

 

In this case however, you would probably be best to contact the following and ask for guidance.

 

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/pension-scheme-enquiries

 

thanks fer that...the P3238s show tax codes 1100LMT, 1065L and 257T...I haven't received any 'notice of coding' advice...

 

as I don't receive a state pension and my total yearly amount is less than the allowance I can't see that the tax folks could charge me for anything...

[Flustered]

Taking them separately

LMT & 7T  suffixes means that you pay tax on all earnings . They do this if they are awaiting information from you. Not sure about the numbers but that could be the amount prior to taxation.

1065L means you have an allowance of £10, 650

Looks like a complete mess from where I sit.

Get in touch with them and ask them for clarification.

 

It' bad enough being an American and getting hit wherever you work but this is silly,

[roger101]

I receive a private pension and the state pension on which I pay tax. 11,000 Allowance then 20%.

When I die (not for a long time yet, I hope) my Thai wife will receive 2/3 of my private pension for the rest of her life. My question is, as a Thai living here will she pay tax in the UK and if so how much.

 

While alive my pensions are paid into my UK bank and I bring it over as I need it. When I'm dead my pension would be paid direct into her bank account here.

[Flustered]

Same position except my wife is Singaporean.

 

At present, as the pensions are UK pensions they are taxable in the UK even if your wife is a Thai citizen and non resident UK. As usual, the tax man grabs all. Just make sure of the 1 year income rule in Thailand

 

This could change, who knows what will happen in the future.

Edited March 1, 2017 by Flustered

[lungbing]

Tax would only be due if your wife's pension is over 11,000. (2016-2017). Less than that and it's covered by the tax-free allowance.  But I suspect she (and my wife eventually) will have an emergency tax coding used by your pension provider until she obtains an NI number and a then a tax code.

[rockingrobin]

1 hour ago, lungbing said:

Tax would only be due if your wife's pension is over 11,000. (2016-2017). Less than that and it's covered by the tax-free allowance.  But I suspect she (and my wife eventually) will have an emergency tax coding used by your pension provider until she obtains an NI number and a then a tax code.

Not everybody is entitled to a personal allowance

 

https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance