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Pensioner

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Pensions

QUESTIONS

Q. I’m a pensioner, how does this affect my tax position?
Q. I’m aged 60 and continue to be in employment, how does this affect my tax position?

QUESTIONS & ANSWERS

Q. I’m a pensioner, how does this affect my tax position?

Non working pensioner:       

  • If you are aged 60 or over, your pensionable income is taxed at 0%.  This means that, effectively, your pension income does not generate a tax liability.
  • If you are aged below 60, your pension will be subject to Income Tax. You should ensure that you have an updated tax code so that the correct amount of tax is deducted from your pension.
  • If you were compulsory retired at age 55, having worked in essential services, eg Royal Gibraltar Police, Fire Services, Royal Gibraltar Regiment etc, your pension from this employment will be taxed at 0%.

Working pensioner:              

Although pensionable income is taxed at 0%, any income derived from employment will continue to be taxed in accordance with your tax code.

Old Age / State pensions and Community Care payments are tax exempt.

Q. I’m aged 60 and continue to be in employment but don’t receive a pension, how does this affect my tax position?

A. A tax credit of £4,000 by way of a reduction to your tax liability shall be given to an individual who is aged 60 or over and is in receipt of earned income.
This tax credit does not apply to an individual who:

  • Has income exceeding £6,000 p.a. from an occupational pension or annuity,
  • Is entitled to receive an occupational pension or annuity exceeding £6,000 p.a. on his retirement,
  • Has commuted his occupational pension or annuity entitlement payable to him and the capital value of the pension or annuity would provide a pension or annuity in excess of £6,000 p.a.
  • Has elected to be chargeable to tax under the Gross Income Based System.