Commentary

E1.960B Tax free annuities bequeathed in wills—example

Personal and employment tax

E1.960B Tax free annuities bequeathed in wills—example

E1.960B Tax free annuities bequeathed in wills—example

This example illustrates points made in E1.960 and E1.960A.

Example—calculation of refund due to trustees from a free of tax annuity

Jane lives in Manchester and has been bequeathed an annuity of £7,000 'free of tax' (ie the annuity has been granted with freedom from tax at the annuitant's effective rate). Jane also receives a small salary from a part time job of £5,500 from which tax is deducted of £1,100.

The trustees are obliged to pay her an amount that has been grossed up at the basic rate. Tax is withheld from that

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