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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13775
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am a pensioner (66) with no income except state pension,

Resolved Question:

I am a pensioner (66) with no income except state pension, and 3 small private pensions. In the last 6 months my tax code has changed and I am paying tax on the privater pensions (despite nothing having changed since I turned 65). My situation is complicated by the fact that for the last 12 months I have been in France caring for a dying brother. The French and UK governments must think I am now permanently here (in fact they think I have bought a flat), so that all my housing benefit and allowances on my rented London flat have stopped.
I would like someone to help me clarify the situation.
Submitted: 9 months ago.
Category: Tax
Expert:  Sam replied 9 months ago.

Hi

Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

I am sure you can appreciate we can only give general advsie as we do not have access to your tax records or any authority to deal with your position on your behalf, and as we are a UK tax forum can only advsie on the UK tax position.

Your UK benefits would have needed a review due to the fact you have been away from your relevant residence and if you are providing 'medically approved care' of someone else. then benefits can be paid up to 52 weeks - but you do not indicate whether you alerted your local housing authority of this and if you did whether they agreed to the amounts being met for that period.

Also did you alert HMRC that you were to leave the UK? Why would they think you have bought a flat? Can you expand on the sequence of events in order for me to assist you further.

Can you also advsie what your tax codes (On each of the three private pensions) has changed from and to

Thanks

Sam

Customer: replied 9 months ago.

Is it useful if I attach scans of my latest 3 pension certificates, and my HMRC Tax code?

Expert:  Sam replied 9 months ago.

Hi

Yes of course

Thanks

Sam

Customer: replied 9 months ago.

Expert:  Sam replied 9 months ago.

Hi

Thanks for the tax code - this reads as a perfectly normal position for me

You have been awarded a full amount of UK personal allowances from which the state pension has to be deducted as its a taxable income from which tax cannot be taken from directly, so by including it as a deduction from you tax code, ensures it can be paid in its gross amounts.

You then have an amount of tax HMRC state you owe from a previous tax year - which has led them to deduct a furtehr £874 allowances (this would equate to tax owed of approx £174.80 (Note 3 of the code will expand further on this.

This then leaves you with £2435 allowances to utilise against your other pensions.

What we need to establish is

1) How much the Scottish Equitable pension is per year. If less than £2435 then we can ask for the excess allowances to then be considered against Scottish Widows and Sun Life -

2) Which is the largest pension - so these unused allowances are used to the best capacity and tax efficiency

Please advise further

Thanks

Sam

Customer: replied 9 months ago.

Previously my 3 private pensions were (annual amount):

Aegon: 1 payment p.a. of £4,204.17

Scottish Widows: £471.96 (paid monthly at £39.33 - but now £31.53)

SLFC: ££406.88 (paid every three months at £101.72 - now down to £81.52)

I am curious why the HMRC thought I owed from a previous year - nothing has changed in my circumstances for 5 years! But perhaps this is another subject.

And then there is the sudden loss of all local council benefits due to my presence in France looking after my brother. He is 62 and has MND - when I first came over to France I had no idea how long he would live, so I came here on a temporary basis (not a permanent move). I still pay rent for my London flat. Is this a subject you can help with?

Expert:  Sam replied 9 months ago.

Hi

Thanks for your response

Then the allowances left over after the £2435 allowances have been allocated on the main pension so it would appear that of the annual payment of £4204 - the first £2435 will be tax free and the balance of £1769 will be liable to 20% Tax = £353.80 (so you would receive £3850.37) when the payment is made

Then the other two pensions should be taxed at basic rate

So £39.33 x 20% = £7.87 leaves £31.46 (so almost the same) and

£101.72 x 20% = £20.03 - leaves £81.69(so again almost the same)

So you tax position is correct based on the tax code - its just a question of whether this unpaid tax is correct.

You state nothing has changed but this might be the first year state pension has been paid for the full year? Or you had not been taxed correctly before (hence you owing tax)

As for your benefits - did you advsie the council of you leaving the UK and why and make a claim for the extension of the benefits - so these could remain considered for a max of 52 weeks - or has the 52 weeks come to an end and this is why these have been with drawn? Pleaese expand then I can advsie further

Thanks

Sam

Customer: replied 9 months ago.

Thanks - your answer sounds correct (although I wonder why I wasted so much money on pension payments if the tax incentive is simply taken back again when paid!).

Council - as I had no idea how long I was going to stay in France, they stopped the payments (and asked for reimbursement) when they found out I had joined the French social security system (as doctors were refusing my EU health card). If my brother died tomorrow I would be back in UK in a few day. I suppose I need to write to the council explain gin my dilemma.

I think we have gone as far as we can for the moment - thank you.

Expert:  Sam replied 9 months ago.

Hi

Thanks for your response

I agree with your sentiments re the pensions !

And if you have applied to the French social security system then this would suggest that you may have a more permanent intention - so I would therefore recommend you write to them and ask for the position you present to

Let me know if you do require anything else - but in the meantime if you could rate me for the level of serice I have provided, it would be appreciated and please if you need additional help in due course do come back to us.

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13775
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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