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Pension for pension

18 June 2013
Issue: 4407 / Categories: Forum & Feedback , Investments , Pensions

The taxpayer has received a pension payment relating to the protected rights of his late wife. Tax has been deducted under PAYE, but does this income form part of relevant UK earnings?

A client has recently received the payment of his late wife’s protected rights fund from her personal pension company. Under the rules existing prior to 6 April 2012 this has been taxed at the basic rate of tax and a P45 has been issued. In the supporting documentation provided by the insurance company this payment is referred to as being taxed as “employment income”.

My query concerns whether my client can treat this income as “relevant UK earnings” for the purposes of making a personal pension contribution in the current tax year.

The opinions of readers would be appreciated.

Query 18 206 – Forward

Reply from Southern Man

Things may be getting a little muddled here. The protected rights of his late wife’s pension have been paid to the client. This could be as an ongoing pension but the wording seems to indicate that this...

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