Interesting Tax matters

[Minkey]

Someone I know has been told that they are the beneficiary to a pension policy from a deceased sibling. However, the money is to be split between him and his sister, but the pension company says that it will only pay into one bank account and the recipient will have to pay a share to the other sibling. How does this work from the tax angle? I'm guessing the money is paid with the tax having been paid initially, but does the other sibling have to pay tax on the share they get?

On a second matter, I had a PPI payment from a bank, which I was faxed on, as it don't pay tax I can claim it back, when filling in the form, do I need to put down any interest from money in a ISA?

 

[andyBeaker]

Someone I know has been told that they are the beneficiary to a pension policy from a deceased sibling. However, the money is to be split between him and his sister, but the pension company says that it will only pay into one bank account and the recipient will have to pay a share to the other sibling. How does this work from the tax angle? I'm guessing the money is paid with the tax having been paid initially, but does the other sibling have to pay tax on the share they get?

On a second matter, I had a PPI payment from a bank, which I was faxed on, as it don't pay tax I can claim it back, when filling in the form, do I need to put down any interest from money in a ISA?

The payment from the pension company should be made to the Executor(s) who then distribute as part of the estate.

Re the ISA interest does not need to be declared on a 'normal' tax return as by definition it is tax free. However, while it seems likely that you would not have to declare it i would either ask HMRC online (they are very helpful) or add it as a note )if you can) when submitting online

 

[Pow-Lo]

Someone I know has been told that they are the beneficiary to a pension policy from a deceased sibling. However, the money is to be split between him and his sister, but the pension company says that it will only pay into one bank account and the recipient will have to pay a share to the other sibling. How does this work from the tax angle? I'm guessing the money is paid with the tax having been paid initially, but does the other sibling have to pay tax on the share they get?

On a second matter, I had a PPI payment from a bank, which I was faxed on, as it don't pay tax I can claim it back, when filling in the form, do I need to put down any interest from money in a ISA?

If you don't pay tax then I'm grassing you up! Tax dodgers like you are costing the economy a fortune!

 

[Minkey]

The payment from the pension company should be made to the Executor(s) who then distribute as part of the estate.

Re the ISA interest does not need to be declared on a 'normal' tax return as by definition it is tax free. However, while it seems likely that you would not have to declare it i would either ask HMRC online (they are very helpful) or add it as a note )if you can) when submitting online

it seems that it will be an ongoing monthly payment rather than a lump sum, and the executor is not very good at dealing with this sort of thing

 

[andyBeaker]

it seems that it will be an ongoing monthly payment rather than a lump sum, and the executor is not very good at dealing with this sort of thing

Sadly it needs to go through the executor - I don't think there is any choice on that.

Never heard proceeds from a life policy being distributed like that!