Retired - how to claim tax back on pension lumpsum payout?

buzz55

Hello,

My uncle is retired with a few years, he's 70 years old. Last year, his pension company offered him x amount in a lumpsum payment, or continue getting a monthly amount until he passes away.
He chose the lump sum and received a few thousand euro towards the end of 2008.
He was taxed on this lump sum payment, and is now looking to claim this tax back.

What form does he need in order to claim this back, as he does not have a p45/p60 for 2008?

His only income at the moment is state pension, plus I suppose a v small dividend from whatever savings he has in the local credit union.

Thanks in advance.

Pablo Sanchez

Did they offer him the lump sum in lieu of paying him a annuity for life or was the lump sum part of the 25% tax free the government allows you take before you buy an annuity?

buzz55

As far as I know, the lump sum was in lieu of paying him per month for the rest of his life.

Pablo Sanchez

Well im not an expert and happy to be proved wrong but im not sure any tax back can be claimed on pension lump sums outside the 25% tax free you can take before you purchase the annuity.

Annuity payments are subject to PAYE so i would think if you commuted this to a lump sum then taxes are due on it.

Pablo Sanchez

The interest payments on his savings should be free of DIRT tax as he is over 65 though. He needs to get a cert from the revenue and provide this to his bank/credit union etc.

BiddyBop

Depending on what type of pension your Uncle had with his former employer, his benefits would probably have been determined by his service with the company and his final salary. Depending on the size of the fund, it sounds like he received a tax free lump sum and was able to take the remainder as a taxable lump sum.

This taxable lump sum is automatically taxed at the higher tax rate, a certificate would (or should) have been issued to your Uncle at the time of payment in order for him to claim any overpaid tax back. This would have detailed the total payment and tax deducted for him to forward to the Revenue at the time. They would then be able to check out his tax credits etc. and refund payment if applicable.

Best bet is to check if this cert. was received, if not contact the pensions provider to get one and then contact the Revenue.

buzz55

Ok, so supposing he has received the cert stating the lump sum amount and what tax was deducted from it - does he need anything else to send to the revenue to see if he's entitled to tax back? i.e. does he need a statement of earnings from his state pension income, does he need a statement from the credit union stating interest received etc?

many thanks

BiddyBop

I don't know exactly what the Revenue's requirements are, from past experience I would assume he will need a copy of his P45 & P60 possibly but safest bet is just to call the Revenue and ask them. They can tell you exactly what else he will need to send in to ensure his claim can be processed without delay.