Tax Rebates & Refunds

Claiming tax rebates in retirement

August 28, 2011
Posted in Tax Rebates — Written by Chris

As a retired person, you may be entitled to claim a tax rebate. There are a number of ways you may have overpaid tax, so it is well worth checking to see if you are owed any money.

The three main ways you may have overpaid are as follows:

1. Through your pension
If you pay tax on your pension through PAYE (Pay As You Earn), you may accidentally end up paying too much. This can happen if you’re on the wrong tax code, you have more than one tax code or your benefits or other income has reduced and HMRC hasn’t been informed of it.

2. Through your retirement annuity
You could end up overpaying if your income from retirement annuities is taxed through the PAYE system (implemented in April 2007) and you haven’t already filled in an R89 form – ‘Application to receive an annuity without tax taken off’.

3. Through your pension lump sum (‘trivial commutation’)
Some people choose to receive their pension fund as lump sum payments rather than small monthly amounts – these are called ‘trivial commutations’. If you have received more than one of these, there is a chance that you paid tax at a higher rate than you needed to.

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