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Pensioners (Taxation)

Volume 885: debated on Tuesday 28 January 1975

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asked the Chancellor of the Exchequer if he will indicate how he treats, for taxation purposes, pensioners, taking single and married couples respectively whose incomes from their pensions is increased by £15 weekly by earning part-time wages and by the same amount from interest on investments.

, pursuant to his reply [Official Report, 27th Jan. 1975; Vol. 885, c. 72], circulated the following information:In each of the cases described the pensioner's tax liability would depend on his total income for the tax year concerned—including the amount of national insurance retirement pension, after taking account where appropriate of any abatement under the earnings rule—and on the tax allowances and reliefs due. The precise figure of liability would thus vary depending on the pensioner's age and the length of time for which the situation described in the Question continued. If, however, the increase continued for a full year, and the pensioner was over 65 and subject to the earnings rule, the gross pre-tax income for the year would be £1,176·76 (single) or £1,470 (married) if the addition took the form of earnings; and £1,266 (single) and £1,559 (married) if the addition took the form of investment. The tax liabilities—at 1974–75 rates and allowances—in the former case would be £182·08 (single) and £165 (married), and in the latter case £211·53 (single) and £213·95 (married).