UK Pension Lump Sum and Tax

andyred

My mother is 80 and a widower. She has no idea what so ever about tax/pensions so Im trying to figure something out for her. She was advised last year that she was due a small lump sum from a pension plan my father never collected in the UK, its around 30k. She was also awarded around 50 euro a week for the rest of her life.

So how does this work with Revenue in relation to tax?

Does she need to declare this money herself or will Revenue be advised by the UK and do any tax calclations for her?

Is the 30k even taxed at all as it was a lump sum and I see some literature online that says the first 200k lump sum from a foriegn pension is tax free?

Will she have to declare the weekly 50 euro every single year now for the rest of her life?

I have asked around a few forums and nobody seems to really have any clue how tax and pensions appear to work! How are 80 year olds meant to figure all this stuff out for themselves. Its nuts.

Geuze

The lump sum - I'm not sure

The weekly pension - yes, this is added to her other incomne and taxed as normally.

You are no doubt aware that people over 65 enjoy three income tax reliefs, so she may well have a zero income tax liability.

Geuze

Does she do an annual Form 12 tax return?

It's sounds like she doesn't?

andyred

https://www.boards.ie/discussion/comment/121173218#Comment_121173218

No, she doesnt fill in anything. She just gets her state pension and small private pension that my father left. Now with the UK pension shes been awarded she wasnt going to do anything as it just goes into her account. Im just trying to figure out if she actually has to do anything at all.

Geuze

Does she claim tax relief on any medical expenses?

Is the husband's pension coded into her tax credits?

People over 65/66 are exempt from income tax up to 18k.

Is she paying any income tax on teh two pensions she receives?

andyred

https://www.boards.ie/discussion/comment/121173938#Comment_121173938

yea she pays a small amount in tax on her current pensions. The tax is automaticaly taken out for her before she gets payment. Just trying to figure out how/if the UK pension will be taxed and what needs to be done. I know tax returns for 2022 need to be declared by the end of October. My mam was just not going to do anything because really she doesnt know any better.

Im trying to figure out if her lump sum gets taxed at all but nobody seems to know how that works from all the forums Ive asked in. Then I need to know if she needs to keep track of her UK pension and declare that every year going forward, as it changes depending on exchange rates, then Ill have to figure out how I fill in the forms and declare it! Never had to deal with the Revenue before for anything.

Henry Ford III

Pension payment is potentially taxable.

Lump sum most likely isn't.

Get professional advice.