Tax Rebates & Refunds

How to get a tax refund on purchased life annuities

September 18, 2012
Posted in Tax Rebates — Written by Chris

There are many situations in which people and businesses can claim tax rebates from HMRC, and one of these that not many people know about is a refund on a purchased life annuity investment.

According to HMRC, you may be able to claim a tax refund if you have a purchased life annuity investment and you are on a low income. This combination of circumstances could mean that you are paying income tax when you don’t need to.

A total of 20 per cent in income tax is automatically taken from the income you receive from a purchased life annuity. However, if you haven’t reached a certain earnings threshold, you don’t count as a taxpayer and you should be able to receive income from your annuity tax-free.

How to claim your tax rebate

If you think you meet the requirements detailed above (you have a purchased life annuity but you are on a low income), you can put in a tax rebate claim. You can do this by filling in an R89 Application form, available from the HMRC’s website, and sending it to whoever pays your annuity.

Alternatively, you can use a tax rebate specialist company to pursue your claim for you. You have around four years to file your claim, but it’s best to get it in early.

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