At Whittaker & Co we are proud to support our forces, and many of our clients are ex-armed forces, our Managing Directors are also ex-army.
Tax Free Pension
In support of the forces, HMRC has also shown backing to our heroes by offering tax allowances on their pensions.
If you have received one of the following awards then section 638 states that no liability to income tax arises on a pension or annuity:
• The Victoria Cross;
• The George Cross;
• The Albert Medal;
• The Edward Medal;
• The Military Cross;
• The Distinguished Flying Cross;
• The Distinguished Conduct Medal;
• The Conspicuous Gallantry Medal;
• The Distinguished Service Medal;
• The Military Medal;
• The Distinguished Flying Medal.
If you have been awarded one of these you will have a pension on behalf of that award. The tax exemption only relates to that pension. For example, a retired soldier is in receipt of an Armed Forces pension of £15,000. They also receives an additional amount of pension in respect of holding a specified award for bravery. In Conclusion, Section 638 does NOT cover the the Armed Forces Pension, just the portion on behalf of the award.