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TonyTax
TonyTax, Tax Consultant
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Does my disabled husband need to pay tax on ESA? Does my

Resolved Question:

Does my disabled husband need to pay tax on ESA?
Does my disabled husband need to pay tax on PIP (Personal independence Payment)
My husband has a small pension and an income from a trust fund.
Submitted: 10 months ago.
Category: Tax
Customer: replied 10 months ago.
ESA is about £94 per week
PIP is about £500 per month
Pension is a teachers pension of about £550 per month
Income from trust is between £18 000 and £20 000 per year.
Expert:  TonyTax replied 10 months ago.

Hi.

As you will read here, contribution based ESA is taxable and income based ESA is not taxable. If your husband receives contribution based ESA, he will pay tax on it at 20%. If you look here, you'll read that PIP is not taxable.

I hope this helps but let me know if you have any further questions.

Customer: replied 10 months ago.
Thank you. I did my husband's self assessment last tax year and ended up paying about £3500 in tax! Just can't believe he has to pay so much tax for such a small income.
Customer: replied 10 months ago.
His full income is about £28 000. Is it because of the money from the trust that he has to pay sop much tax?
Expert:  TonyTax replied 10 months ago.

It is. Doesn't the trust pay tax? If so, your husband should get credit for that against his tax liability?

Customer: replied 10 months ago.
The trust is in Jersey. It was set up by his father. My husband gets interest from the trust investments.
Customer: replied 10 months ago.
does £3500 sound about right to you?
Expert:  TonyTax replied 10 months ago.

If its a Jersey trust, it probably pays no tax so the tax figure makes sense.

Customer: replied 10 months ago.
Thank you Tony. I am grateful for your help. Could I ask just one more question. Where on the Self assessment tax form do I declare the trust income? Do you know?If I remember correctly it is all worded very strangely on the tax form.
Customer: replied 10 months ago.
Also can we claim any tax back on disability equipment? I know it is exempt from VAT...but I bought a car last year that could carry an electric wheelchair. I usually drive a little run around but had to sell it and buy a big expensive car.
Expert:  TonyTax replied 10 months ago.

I'll find the pages for you.

Customer: replied 10 months ago.
We spend a lot of money on therapies and carers to keep him going...at least £900 per month. Is this tax exempt?
Customer: replied 10 months ago.
I mean can we claim back for it?
Expert:  TonyTax replied 10 months ago.

See box 41 on page F6 here. See the notes on page FN11 here.

There is no tax relief for the types of expenditure you mention. If your husband is over 65, he may be entitled to tax free attendance allowance which you can read about here and here. You may be entitled to carer's allowance which you can read about here.

Customer: replied 10 months ago.
Thank you! I cannot claim carer's allowance as I earn £39 000. My husband is not over 65! I just feel angry that he has to pay so much tax when his income only just keeps him alive! I work full time to cover household bills and cannot afford to give up work to care for him full time. I do all evening care routines and night care. The state pays nothing towards his care. Trying not to get bitter and twisted! Many Thanks for your help Tony. Much appreciated!
Expert:  TonyTax replied 10 months ago.

Thanks. I'm sorry I can't give you any good news.

Would you mind rating my answer before you leave the site please.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15881
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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