Should I get tax back now I’ve stopped working?
QI’M 69 and retired from full-time work at 59, mainly due to my health.
I still carried on working part-time. I got my state pension at 65.
Now I’ve stopped working, am I entitled to the tax I paid during my last year of work?
AIF YOU stopped working part way through a tax year (April 6 to April 5 the following year) there’s a chance that you have paid too much tax for that year and it may be possible for you to claim back a percentage of what you’ve previously paid.
There’s a tax checker tool on the HM Revenue & Customs website (hmrc.gov.uk).
If the result estimates you have overpaid tax it will also tell you how to go about claiming a refund.
Q
A FRIEND who has been seriously ill has moved in with me. I’m 83, they are 76.
I want them to be able to stay in my home for the rest of their life. My children agree, but should I add a codicil to the will I wrote 10 years ago?
AGIVING your friend a ‘life interest’ in your property has a knock-on effect on your will and what your beneficiaries may be entitled to, and when. It’s great your children are in agreement, but I would seek legal advice on how best to now structure your affairs.
Q
I’VE managed to build up some savings over the past few months and I’m thinking of dipping my toes into investing. What should I think about?
ABEFORE looking to invest it’s important to ensure you have sufficient cash to give you an emergency fund.
A basic rule of thumb would be to keep back six months’ worth of your regular monthly bills if you’re pre-retirement and three months for postretirement, plus any planned additional spending over the next couple of years.
If you have excess cash and don’t envisage needing it for between five to seven years, investing the surplus is an option.
Investing can be complex and you need to ensure you understand the risks involved.
You will need to decide your investment goals, the period you want to invest over and your risk appetite – how much you can afford to lose.
Remember investments can go down as well as up.
Q
WHAT happens when a person has an equity release or lifetime mortgage plan on their home in relation to inheritance tax?
Does IHT take the value of the house before it’s sold or on the money after sale?
A
THIS is dealt with in the same way as any debt outstanding at the date of death – it’s deducted from the value of the estate before the IHT calculation is completed.
The equity release loan will need to be repaid on the house owner’s death.