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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hello Sam I receive an allowance form my ex husband, he pays

Customer Question

Hello Sam I receive an allowance form my ex husband, he pays tax on this before it is deposited in my account, do I also need to pay tax on this? I am a UK state pensioner £489.44 every four weeks with a private pension of an income of £36.47 a month along with a company pension of £273.82 a month all after tax. I receive £247 a month from my ex-husband, I was told I did not have to declare this as he already pays the tax, I am now worried in case this is incorrect?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

I would not worry too much, but you should declare your husband's allowance on your annual self assessment. The tax deducted by him will be allowable to offset any tax liability you may have.

You are certainly liable to tax on your income which I estimate at some 14.6K pa. Less you personal allowance of 10K leaves 4.6K to be taxed at 20% = 920 quid per year. Without details of the tax codes being used to calculate your occupational and private pensions, which are frequently reduced below the standard 1000L to collect tax on your State Pension, which is taxable, but paid without deduction I cannot take my computations any further.

If you are lucky you may be due a refund of overpaid tax, although the purpose of tax codes is to make individuals tax neutral at the end of each tax year.

I would be inclined to write a letter of explanation to your tax office and seek to amend any return you have made and remember to put your ex-husband's allowance in next year!
Customer: replied 3 years ago.

Dear XXXXX thank you for your advice, I only pay a minimum amount of tax my tax code for 2014 - 2015 is 325T.


 


My Gov Pension for the year is £6362.00


Private Pension £449.64


Company Pension £3290.64


I also have an underpayment of tax of £9.00 which is being paid this year.


 


With £ 2964 from my husband. making it a total of £13075,28 which is a good £1500 less than you have calculated, I am liable to pay £3075.28, just my calculation I hope I am correct. Should I speak to my husband and ask him how much tax he pays?


 


Kindest Christine

Expert:  bigduckontax replied 3 years ago.
My figures were, as I said, only rough estimates.

Unfortunately the data in your original question was a tad confusing, but you have verified it for me now. You will be liable for 3.075K of your income to be subject to tax, that is GBP 615 per annum. You should ask your husband for a certificate of tax deducted from your payments which he should send you at the end of each tax year. This will enable you to both fill in your self assessment correctly and also determine your own tax position so you can check on HMRC's computations.

It is clear from your tax coding that HMRC are taking your State Pension into account and also other amounts they assume to be being paid to you without deduction of tax also. Like most people in your position a self assessment and an adjustment at each year end is inevitable.
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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.