Pensions and Benefits

Enter details of any pensions and state benefits received during the year.

State Pension

State pension Enter the total amount of state pension receivable for the year. The amount here will populate box 8 on page TR3 of the Tax return.
State pension lump sum before tax If your client received a state pension lump sum, then enter the gross amount. This figure will appear in box 10 on page TR3 of the return.
Tax taken off state pension lump sum If your client received a state pension lump sum from which tax was deducted at source, then enter the amount of tax deducted. This amount cannot be greater than 45% of State pension lump sum, plus £1 (for rounding). This figure will appear in box 11 on page TR3 of the return.

Other Pension Income

This section shows details of occupational pensions entered.

To add details of income from an occupational pension

Click Create Pension Income. This will open Create Pension Income, on which you can enter:

  • Pension provider
  • Contract number
  • PAYE reference
  • Date of commencement
  • Date of cessation
  • The figure of Gross pay
  • The figure of Tax deducted
  • Whether the pension is for overseas public service and qualifies for a 10% reduction

From the Save drop-down menu, Select Save and Close to save the information entered and to return to Pensions and Benefits. Alternatively, from the same menu, select Save and New to save the information entered and to open a fresh Create Pension Income page.

To remove details of a pension

Click the cross next to the name of the pension provider and Delete.

To edit details of a pension

Click Edit, at the right of the details row for the pension.

Edit Pension Income will open, on which the Pension Income Details will be displayed. The details are the same as for Create Pension Income, above. Amend these details as required.

From the Save drop-down menu, Select Save and Close to save the information entered and to return to Pensions and Benefits. Alternatively, from the same menu, select Save and New to save the information entered and to open a fresh Create Pension Income page.

The Total Gross pay and Tax deducted appear at boxes 11 and 12 respectively on page TR3 of the tax return. Each pension is shown individually at Computation Preview.

Child Benefit

Introduction

This is a general overview only and you are advised to refer to the legislation at Chapter 8 of ITEPA 2003 and other relevant material.

If the client’s (or their partner’s) income is over £50,000 and either the client or their partner were entitled to receive Child Benefit during the year, then the client may be liable to pay an Income Tax charge based on that Child Benefit entitlement. The charge may also apply if a child lived with the client or their partner during the year and the client did not claim Child Benefit for the child but someone else did and that other person makes contributions to the child’s upkeep.

For these purposes, a partner is defined as a husband or wife, civil partner or person lived with as if they were a husband or wife or civil partner and, in the cases of a husband and wife or civil partner, they are neither separated under a court order nor separated in circumstances in which it is likely to become permanent. Two such partners are a couple.

The charge is based on the ‘adjusted net income’ within an income range. This is generally the income after certain deductions have been made and is as determined by Section 58 ITA 2007. Where the adjusted net income is over £60,000, the charge is calculated as the full amount of the Child Benefit entitlement. For adjusted net income between £50,000 and £60,000 the charge is based on 1% of the amount of Child Benefit entitlement for every £100 of income over £50,000.

The charge will not apply to any entitlement for which an election to not receive Child Benefit has been made.
If the client’s adjusted net income is over £50,000 and the client has no partner, then the client is liable to the charge. If the client has a partner, and either one or both of them has adjusted net income over £50,000 then the partner with the higher income is liable to the charge.

Where relationship changes occur, the client may:

  • become liable for the charge where a new relationship starts if the client is the person with the higher income
  • cease to be liable for the charge where a relationship ends.

Entering data

Only complete this section if:

  • Net earnings for the year are greater than £50,000.
  • The client is the higher-earning spouse and therefore liable for the child benefit tax charge.

Enter where indicated the number of children for whom the client or partner is claiming child benefit, the amount of entitlement and, if the benefits have stopped, the date of cessation.

The child benefit charge will be included at Computation Preview.

Other State Benefits

Enter in this section the amount of Employment Support Allowance, incapacity benefit and Jobseeker’s Allowance claimed by your client for the year, together with the figure of tax deducted from incapacity benefit.

These details will be included at Computation Preview and will be used to complete boxes 13, 14 and 15 on page TR3 of the tax return.

Other Benefits

Enter in this section details of other benefits received.

Additional Description rows will appear in the section as existing ones are populated.

These details will be included at Computation Preview. The Total amount will populate Box 16 on page TR3 of the tax return.

Did you find this helpful?

Still need help?

Ask the Sage City community. Sage City is the place to ask questions, share tips and ideas, get practical advice and all the breaking news. Alternatively, find out other ways of getting in touch.

Visit Sage City