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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16150
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I was PAYE until Jan 2011. After that I was a carer with no

Customer Question

I was PAYE until Jan 2011. After that I was a carer with no taxable income. Since Jun 2012 I have been receiving a private widows pension of approx £285 monthly and in addition to that since June 2013 £580 monthly from renting a property.
Since leaving my PAYE employment I have not paid any tax.
Help? What should I be doing? I am 53 years old, a widow, do voluntary work and have savings (payouts of pensions my late husband had).
Submitted: 4 years ago.
Category: Tax
Expert:  TonyTax replied 4 years ago.

Can you tell me what income you have other than your private pension of £285 per month and your rental income please. You mentioned payouts of pensions your late husband had. Do you receive monthly income or were those payouts one off lump sums? How much savings income do you receive in a year? Is that bank or building society interest?
Customer: replied 4 years ago.

- Other than the pension and rental I receive, I only get interest from my bank accounts.

- The other pension payouts I received after my husbands death (Feb 2012) were lump sums.

- Interest for Jun 2012 - Jun 2013 I earned approx £1330 from Barclays (after basic tax was deducted) and approx £1100 from Santander (no tax deducted).

Expert:  TonyTax replied 4 years ago.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 4 years ago.
Hi again.

Carer's allowance (assuming you claimed it) is taxable but only if your total income exceeds the personal allowance.

The lump sum payments from your late husband's pension plans may be life assurance attached to the pensions. Usually, the payout will be the greater of the value of the pension fund or the life assurance cover. Either way, they aren't taxable.

You are entitled to a personal allowance for 2013/14 of £9,440 which means that the first £9,440 of your income will be tax free and you will pay tax at 20% on the balance. For 2014/15, the personal allowance will increase to £10,000.

In a full tax year, your income will be around £13,140 (£3,420 + £6,960 + £1,100 + £1,660). That's assuming you incur no expenses related to the let property. Take a look here and here for information on the types of expenses you can claim against rental income.

As the tax office probably may not be able to collect any tax due on rental income through a tax code which would be operated against your pension, you ought to register for self-assessment using a form SA1.

Your income for 2012/13 was probably less than the personal allowance of £8,105 so you should have no tax to pay for that year but it would be as well to check.

If you register for self-assessment, you will be sent your first tax return after 5 April 2014.

I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 4 years ago.
I have to go out for a while but will be back this evening.
Expert:  TonyTax replied 4 years ago.
Hi again.

I can see that you have read my answer to your question. If you need further clarification please ask for it. If not, would you kindly rate my answer so that I get paid for my work. Thanks.