Income tax on a pension

antiskeptic

My mother is 70 and since my father died 3 years ago has been in receipt of his work pension (approx. 400 week). She's been granted the state widows pension and has had this money backdated to the date of my dads death. So a lump sum of about 25k and 220 a week from now on.

What's the situation with income tax on pensions like this and how do you go about 'declaring' if not a paye worker.

thanks..

Kristopherus

Go on to revenue.ie and look up the age-related income tax credits. I'm not sure how high they are, but they are being abolished in the 4-yr plan. As far as the arrears are concerned she should seek to have the arrears taxed over the no of years since your father's death. She should ask revenue to assess that lump sum in the most advantageous way for her. Bear in mind she will have to pay tax on the combined income. The question is how much. She will be reassessed again for the 3 yrs since your father's death. There should be a special allowance that would apply in the year of death.Her tax credits will then be offset against her liability. I hope this makes sense to you.

mp22

http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax_credits_and_reliefs/older_peoples_tax_credits_and_reliefs.html
info here