|
Last Updated: January 2024
A Exempt
Pension income
As established in the Budget for 2022, pension income
received by an individual who is at least 61 years of age is partially
exempt, gradually rising to full exemption by 2026, subject to capping. The
exempt portion is as shown in the table below and should be omitted from
the individual’s tax calculation:
Basis Year
2022: 20% of the pension income but capped at 2864
2023: 40% of the pension income but capped at 5987
2024: 60% of the pension income but capped at 9732
2025: 80% of the pension income but capped at 13309
B Tax Rebate
on Pensions
1. As established 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 (excluding exempt pension
income as per Section A above) is first to be charged to tax at the normal
tax rates applicable to the individual concerned: single rates, parent
rates or married rates.
The rebate is calculated as follows:
|
(i) Person on single rates:
|
Tax rebate = (taxable pension income less 12,000) X
15%
|
|
(ii) Person on parent rates:
|
Tax rebate = (taxable pension income less 13,000) X
15%
|
|
(iii) (a) Person on married rates:
|
Tax rebate = (taxable pension income less 15,000) X
15%
|
|
(iii) (b) Person on married rates:
|
Further tax rebate = (all taxable income
less 15,000) X 15%, less rebate as per (iii)(a)
|
These rebates are subject to the following cappings:
|
Basis Year
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022 2023 2024 2025
|
|
|
(i)
Person on single rates
|
210
|
615
|
650
|
705
|
744
|
783 880 1068 696
|
|
|
(ii)
Person on parent rates
|
150
|
405
|
440
|
495
|
534
|
573 670 858 546
|
|
|
(iii) (a)
married rates
|
45
|
75
|
110
|
165
|
204
|
243 340 528 246
|
|
|
(iii) (a)
married rates (further rebate)
|
75
|
150
|
150
|
300
|
540
|
540 540 540 540
|
|
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 pension thresholds were the
following:
|
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022 2023 2024 2025
|
|
pensions income rebated
|
varied
|
13200
|
13434
|
13798
|
14058
|
14318 14968 16220 16636
|
|
further income rebated
|
500
|
1000
|
1000
|
2000
|
3600
|
3600 3600 3600 3600
|
Further information:
Tax
Rebate on Pensions Examples
Pension
Income from Department of Social Security
Overseas
Pensions
|