Second Or The Third Year's Income

So the choice you face is whether to be taxed twice on the second or the third year's income. The choice is yours, so clearly you will choose the year when you had the least income to be taxed.

Thereafter, you continue to be taxed on the previous year's income. You can exercise this choice up to six years after the year in question.

Similar provisions apply when the source of income ceases. One of the final years' income is not taxed at all.

Normally it is the last but one year which is omitted, so that the final tax bill is on the final year's tax.

But the Revenue, not you, can choose to tax the last but one year instead of the final year if they wish. They usually choose to do so to increase your tax bill.

Your retirement pension counts as part of your income, so you can have only a limited income on top of it before you start paying tax. Here we look at the interaction of tax and pensions, including widow's pension and foreign pensions.

Later we explain the terms used and the basic principles of income tax for people over sixty-five.

Want to read about - Income On Top Of Basic Pension

or The Inland Revenue

Income On Top Of Basic Pension

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