Last Updated: 04/01/2021
Tax Rebate on Pensions
1. As announced in the Budget for 2017, individuals who are
at least 61 years of age are allowed a tax rebate on their pension income. The
proper tax due should be calculated as shown hereunder.
2. All income is first to be charged to tax at the normal tax rates applicable to
the person concerned: single rates, parent rates or married rates.
The rebate is calculated as follows:
| (ii) Person on parent rates: |
Tax rebate = (Pensions income less 10,500) X 15% |
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| (iii) (a) Person on married rates: |
Tax rebate = (Pensions income less 12,700) X 15% |
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| (iii) (b) Person on married rates: |
Further tax rebate = (all income less 12,700) X 15%, less rebate as per (iii)(a) |
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These rebates are subject to the following cappings:
| (i) Person on single rates |
210 |
615 |
650 |
705 |
744 |
|---|
| (ii) Person on parent rates |
150 |
405 |
440 |
495 |
534 |
|---|
| (iii) (a) married rates |
45 |
75 |
110 |
165 |
204 |
|---|
| (iii) (a) married rates (further rebate) |
75 |
150 |
150 |
300 |
540 |
|---|
3. The
tax due by the pensioner is therefore the tax calculated using the normal rates, less the rebate/rebates calculated as shown above.
4. The thresholds were as follows:
| rebate |
varied |
13200 |
13434 |
13798 |
14058 |
|---|
| further rebate |
500 |
1000 |
1000 |
2000 |
3600 |
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Further information:
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