In this section:
- Reclaiming tax if you've overpaid through your job
- Claim back tax if you've had too much deducted from your pension
- Tax return corrections and refunds
- Claiming a tax refund when you stop work
- Claiming back overpaid National Insurance contributions
- Claiming back Income Tax on behalf of someone who has died
- Getting tax-free interest on savings or claiming tax back
- Reclaiming tax on purchased life annuity income
- Understanding your tax refund
Reclaiming tax on purchased life annuity income
If you're on a low income and have a purchased life annuity investment you could be paying Income Tax when you don't need to. If this is the case, you can register to get the income tax-free. You can also claim a refund of any tax you've overpaid.
Tax and tax reclaims on purchased life annuities
If you've got a purchased life annuity, 20 per cent tax will be automatically deducted from the income element you receive from it. However if your overall level of income means you’re not a taxpayer you can ask to receive purchased life annuity income tax-free.
To make a claim you'll need to fill in a form R89 Application to receive an annuity without tax taken off. If you hold a joint life annuity you need to complete form R86 Application to receive a joint annuity without tax taken off. Send the form to whoever pays your annuity. You can download the forms below.
Go to form R89 Application to receive an annuity without tax taken off
Go to form R86 Application to receive a joint annuity without tax taken off
How to claim tax back
If you think you've paid too much tax on your purchased life annuity you'll need to fill in a form R40 Tax Repayment Form. You'll have to do this for each year you think you paid too much tax.
Time limits for claiming back tax
The time limit for making a claim is no later than 31 January five years after the end of the tax year (5 April) in which the overpayment was made. For example, a claim for the tax year 2002-03 which ended on 5 April 2003 must be made by 31 January 2009.
Go to form R40 and help notes on completing the form
What to do if your circumstances change
Your income and tax allowances can change from year to year - and during the year. So you may find your income goes up and your tax allowances no longer cover it.
If this happens it's important you tell your annuity provider straight away so they can start taking tax off your payments. Otherwise you may have a tax bill at the end of the year.
Getting help
For help on reclaims for purchase life annuity income you can call our Retirement Annuity Helpline on Tel 0845 366 7868.
Tax on other types of retirement annuity
Since April 2007 all other types of retirement annuity (personal pensions taken out before July 1988) have been taxed through the PAYE (Pay As You Earn) system so you should be paying the right amount of tax if any is due. To find out more read our related guide below.
More useful links
Read about tax on bank and building society
accounts
Read
about saving and investing with ISAs on the Directgov website
Find out about children's savings schemes and accounts on the Directgov website
