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IS DEPENDANTS PENSION TAXABLE?

  • 06-09-2010 12:41PM
    #1
    dermita
    Registered Users, Registered Users 2 Posts: 5 ✭


    My partner recently passed away and we had 3 children. They are all under 18 and each receiving e12k pa pension from his employment. He worked for a financial institution, had retired and was in receipt of a pension himself.

    I have been told that the pension will be taxed at 20% as it is a pension but that if they were receiving income from a regular job in a local shop this income would not be taxed.

    Is this information correct? Is it true that their pension should be taxed? I have made several phone calls to the revenue, accountants, citizens advice bureau and the pensions board and no two people are giving me the same story. The pension continues to be paid less 20% tax though.

    I would welcome any information. kind regards.


Comments

  • #2
    Legend100
    Registered Users, Registered Users 2 Posts: 736 ✭✭✭Legend100


    is it the children that are receiving the pension?

    ok re read the message and i can see that it is. They are correctly being deducted tax at 20% but to avoid it they need to have their tax credits transferred to the pension.

    All income from employment/pension is taxable (subject to an exemption on age grounds) and it is the tax credits that will determine whether any tax is payable. If they are not working anywhere else, they won't pay any tax on the pension if their credits are transferred over. They will need to contact the Revenue to allocate their tax credits


  • #3
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    All pension payout suffer withholding tax at the standard rate.

    It is an attractive form of saving as you avoid tax at your marginal rate at 41/42% but suffer withholding tax at 20% when it is paid out.

    It has nothing to do with your tax credits. All pension payments suffer this withholding tax.

    Now the reason you can't get the same advice or sane advice is because there are many many different types of pension.

    The person to contact is the person responsible for administering the pension to find out what type of pension it is. Contact his employers and ask who administers the pension and get in touch with them.


  • #4
    dermita
    Registered Users, Registered Users 2 Posts: 5 ✭dermita


    Many thanks for your help with this.


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