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bigduckontax, Accountant
Category: Tax
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I live in Ireland and only get #67.00 per week. I am taxed

Customer Question

I live in Ireland and only get #67.00 per week. I am taxed on 100% of the complete pension. This does not seem right. ?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
It is normal for pensions to be taxed in the country of origin. Your State Pension (SP) is taxable, but paid gross. It would be normal for the tax deducted from your army pension to be adjusted to recover the tax not paid on your SP. This would be done by reducing the tax code number to make you tax neutral at the end of the tax year. The secret here is to check the code being applied to your army pension to ensure that it has been correctly calculated. HMRC have got my initial tax code incorrect these last 20 years so you have to watch the code like a hawk,
Any tax deducted is, under the Double Taxation Convention between the UK and Ireland, allowable as a tax credit against any Irish tax liability. The Convention precludes the same income stream being taxed in both jurisdictions, but does not protect you from differences in rates of taxation.
I do hope that my reply has shed some light on your position. It is a case of constant checking.
Customer: replied 2 years ago.
I live on my uk pensions and get no money from Ireland. I pay tax on 12,000+ oap but only get paid 67.00+ per week. I have three other pensions and I am taxed on each of them separately.I feel that something is not right. Regards, john.
Customer: replied 2 years ago.
Sorry meant taxed on 6,000+ oap not 12,000+
Expert:  bigduckontax replied 2 years ago.
As I told you John it is normal for pensions to be taxed in country or origin. Each pension will be taxed in accordance with the tax code issued by the HMRC tax office relevant to the pension provider. The situation is further confused by your SP being taxable, yet paid gross. Errors in the tax codes can result in all the pensions being taxed at the basic rate and you being over taxed which is why I advised you to check the codes and challenge them with HMRC if they are wrong. Of course, it will all come out in the wash as it were when you self assess at the end of each tax year when any over payment will be refunded. If your SP is 5K then you should be receiving about GBP 115 a week. You will have to take this up with the Pensions Office which issues your SP. That office writes to you every year explaining the SP computation.