WHY does my mother have to pay tax on my late father's pension?

Question

when he was alive he worked 42 years with British Gas and paid all his taxes, my mother is in fact getting taxed on money my father had already been taxed on. and why does my ex wife pay no tax on the £160.00 a month maintenance which I pay her and she still gets all her benefits ??????? .........the British government have got it all wrong....let's get Gordon Brown out

Answer 1

Pensions have been taxable income for longer than Gordon Brown has been alive.  You get a tax deduction for the cost when you pay in to the pension plan, and you pay tax on the pension when it comes out.  Sort of fair(ish).

Ex wives' maintenance is different.  That's called discrimination, and you can lay it at GB's door!

Answer 2

Because its all fuc**d up. OK get incapability Brown out - who replaces him? and do you honestly think they will reverse the decisions on tax - tax on fuel, higher tax on cars? I dont think they'll change anything. the Conservatives will get to power and just say 'we cant cut taxes because labour messed it up and we need the money'

Meet the New Boss - Same as the Old Boss.

Answer 3

Any money he put in his pension was tax free. So if he earned £10,000 a year and put £500 into his pension - he was taxed on the £500.

However when the pension pays out - then it is taxed. However most pensioners will have such a low income it is unlikely to be taxed - they will have the normal personal allowances.

The money you pay has been taxed before it is sent to her - and is 'unearned' income - and therefore is not taxable. However it will affect her benefits.

I agree the system could be better though.

Answer 4

Sad to say we all pay tax even on any pensions.My small health service pension was hit by the 10p tax whereas I was paying £20 I am now paying £40.As I continued to work they lumped my pension with my monthly earnings so in theory they tax me three times.It is very disheartening I know but someone has to pay for the ones that wont leave their beds. I bet your mum is from the era when people would have been too shy not to pay their way.There are more good hard working people than those who wont work I remind myself of that when I am on the motorway every morning and see all those going off to work and feel sorry for those who have had no good grounding and been given the parental motivation to do a job no matter what. We are all a cog in a wheel whether you collect the garbage or perform brain surgery. I feel sad for the young ones of today and am thankful for the era in which I have lived. Tell mum she is not on her own.

Answer 5

Everyone has a tax code, which indicates how much tax free income you can receive per year before you pay tax. The income you receive which exceeds that amount, is taxable.   It does`nt make any difference whether it is earned income or pension.   I`m a pensioner and I have to pay tax on my pension as well, its the same for everyone.

Answer 6

Your father did not pay tax on his pension contributions.  If it was a company scheme then the conts. would have been taken from his pay before the tax was calculated.  If it was a personal scheme then the government adds the tax into the scheme.

The money you pay your ex. has already been taxed.

Answer 7

Your Mother has to pay tax because her total income must be over her personal tax allowance. Your Father would have had tax relief on his pension scheme contributions, so he wouldn't have paid tax on that.

Your ex-wife doesn't pay tax on the maintenance money, because you have already been taxed on it. This came about when the married man's tax allowance was abolished, likewise tax relief on maintenance payments made.

Answer 8

I would presume your Mother is of or over pensionable age, so that for this financial year, 2008-09  she will be entitled to  over £9000 approx. income before any Tax is paid, subject to a maximum income not exceeding £21000 or so. I cannot recall the exact figures, but the above give an idea.

Her Taxable income would include both her State Pension and any Company Pension  paid  from her employment or her Husbands, and any other income not taxed at source.

Do not think that a change in Government will make much difference to your Mother's taxable position; all Governments have to raise revenue and Taxation is with us until the Sun goes nova.

Janet S. - how do you make out that 'they' tax you three times?  All income , earned, unearned and including Pensions where appropriate , are normally combined for Tax purposes, and only taxed the once, even if you see it on different accounts. Generally the State Pension is paid tax free and tax deducted from earned income. Interest and dividends are usually taxed at source at the standard rate, and if you are in the higher tax bracket, you have to pay the difference. If you are being taxed three times, then you are entitled to a rebate !

Answer 9

She doesn't have to.  Unless you are afraid of the invisible gun in the room.  When you don't pay your taxes,  they come after you with guns.  Coercion, pure and simple.  

Taxes upon taxes?  You haven't heard of that?  How about being taxed on oats and then taxed on the fertilizer it produces?  

Stand up for liberty.  

Good luck!