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Pensions

Last Updated: 22/02/2022​

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:   

​(i) Person on single rates: ​Tax rebate = (Pensions income less 9,100) X 15%
​(ii) Person on parent rates: ​Tax rebate = (Pensions income less 10,500) X 15%
​(iii) (a) Person on married rates: ​Tax rebate = (Pensions income less 12,700) X 15%
​(iii) (b) Person on married rates: ​Further tax rebate = (all income less 12,700) X 15%, less rebate as per (iii)(a)

These rebates are subject to the following cappings: 

​Basis Year ​2017 2018​ 2019​ ​2020 2021​ ​2022
​(i) Person on single rates ​210 ​615 ​650 705​ 744​ ​783
​(ii) Person on parent rates ​150 ​405 ​440 ​495 ​534 ​573
​(iii) (a) married rates ​45 ​75 ​110 ​165 ​204 ​243
​(iii) (a) married rates (further rebate) ​75 ​150 ​150 ​300 ​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 thresholds were as follows:
​ ​2017 ​2018 2019​ 2020​ 2021​ 2022​
​pensions income rebated ​varied 13200​ ​13434 ​1379​8​ ​14058 14318​
​further income rebated​ ​500 ​1000 ​1000 ​2000 ​3600 ​3600
 
 
Further information:

 

 
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