| Guidelines
For Pensioners
|
| FILING
RETURNS OF INCOME AND ESTIMATES OF TAX |
| A person
60 years and over who is in receipt of a pension and whose assessable
income exceeds $40 000 in an income year shall deliver to the Commissioner
a return of his assessable income on or before April 30th in the year
following that income year. (Section
52(2)(f)) |
|
| PERSONAL
ALLOWANCE |
| An individual
who is 60 years or over and receives a pension is entitled to claim a
personal allowance deduction of $40 000 from his assessable income in
respect of income year 1998 and every subsequent income year. (Section
38B(1)(b)). Thus an individual who is 60 years or over, but does but
does not receive a pension or an individual who receives a pension but
is not 60 years yet would not qualify for the $40 000 personal allowance.
The two conditions of being 60 years or over and in receipt of a pension
must be met simultaneously. |
|
| SPOUSE
ALLOWANCE |
| A married
person who qualifies for a personal allowance of $40 000 in accordance
with Section 38B(1)(b)
is also entitled to claim an allowance for spouse if relevant. |
|
| PENSION
INCOME |
| Pension
income, including National Insurance and Social Security Pension –
(Section 8(1)(f)), is subject
to tax. A pensioner who has attained the age of 65 may also be in receipt
of an additional pension from the National Insurance and Social Security
Scheme, which must be included in that person’s assessable income. |
|
| EXEMPT
INCOME – INTEREST |
| With
effect from 1st May, 1995, interest received by or credited to a pensioner
sixty years or over must not be included in that individual’s assessable
income (Section 9(1)(w)).
Therefore in keeping with Section
64C(4) Withholding Tax of 12.5% is not applicable to interest received
from the following sources namely: |
| (1) Bank
Deposits and deposits with other lending institutions |
| (2) Mutual
Funds |
| (3) Government
Securities |
|
| TERMINATION
OF WITHHOLDING TAX |
| An individual
who has attained the age of sixty (60) years and is in receipt of a pension
may file a Declaration with the relevant financial institution to prevent
further deduction of withholding tax from interest paid or credited to
that individual. The Declaration form is obtainable from the Department
– Customer Service Division (Ground Floor). |
|
| REFUND
OF WITHHOLDING TAX |
| Where
a pensioner 60 years or over has suffered a deduction of tax from interest
paid or credited to that pensioner, then that pensioner may apply to the
Commissioner for a refund of the tax withheld. A statement must accompany
a request for a refund of tax withheld from the relevant financial institution
showing the amount of tax withheld from interest paid or credited to that
pensioner. |
