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Income Tax (Earnings and Pensions) Act 2003

Type Public General Act

Publication 2003-03-06

Last updated 2026-03-15

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Provision	Income	Chapter (of this Part)
Section 569	United Kingdom pensions	Chapter 3
Section 573	Foreign pensions	Chapter 4
Section 577	United Kingdom social security pensions	Chapter 5
Section 579A	Pensions under registered pension schemes	Chapter 5A
Section 609	Annuities for the benefit of dependants	Chapter 10
Section 610	Annuities under sponsored superannuation schemes	Chapter 10
Section 611	Annuities in recognition of another’s services	Chapter 10
Section 615	Certain overseas government pensions paid in the United Kingdom	Chapter 11
Section 619	The House of Commons Members' Fund	Chapter 12
. . .	. . .	. . .
Section 629	Pre-1973 pensions paid under OPA 1973	Chapter 14
Section 633	Voluntary annual payments	Chapter 15
Section 637B	Pensions treated as arising from payment of pension commencement excess lump sums under registered pension schemes	Chapter 15A
Section 637G	Pensions treated as arising from payment of trivial commutation lump sums and winding-up lump sums under registered pension schemes	Chapter 15A
Section 637N	Pensions treated as arising from payment of trivial commutation lump sum death benefits ... under registered pension schemes	Chapter 15A

Amount charged to tax

567

(1) The amount of pension income which is charged to tax under this Part for a particular tax year is as follows.

(2) In relation to each pension, annuity or other item of pension income, the amount charged to tax is the “net taxable pension income” for the tax year.

(3) The net taxable pension income for a pension, annuity or other item of pension income for a tax year is given by the formula—

$$TPI-DPI$where—TPI means the amount of taxable pension income for that pension, annuity or item of pension income for that year (see subsection (4)), andDPI means the total amount of any deductions allowed from the pension, annuity or item of pension income (see subsection (5)).$

(4) For the purposes of this Act—

(a) the amount of taxable pension income for a pension, annuity or other item of pension income for a tax year is determined in accordance with Chapters 3 to 15A of this Part (which contain provisions relating to this amount for each type of pension income); and

(b) in determining the amount of taxable pension income for a pension, annuity or other item of pension income, any exempt income is to be excluded.

(5) The deductions allowed from a pension, annuity or other item of pension income are those under—

section 567A (deduction to avoid double taxation where Part 7A has applied to the source of the pension income);

section 617 (10% deduction from an overseas government pension to which section 615 applies);

Part 12 (payroll giving).

Person liable for tax

568

For the provision identifying which person is liable for any tax charged under this Part on a pension, annuity or other item of pension income, see Chapters 3 to 15A.

Chapter 3 — United Kingdom pensions: general rules

United Kingdom pensions

569

(1) This section applies to any pension paid by or on behalf of a person who is in the United Kingdom.

(2) But this section does not apply to a pension if any provision of Chapters 5 to 14 of this Part applies to it.

(3) For pensions paid by or on behalf of a person who is outside the United Kingdom, see Chapter 4 of this Part.

“Pension”: interpretation

570

In this Chapter “pension” includes a pension which is paid voluntarily or is capable of being discontinued.

Taxable pension income

571

If section 569 applies, the taxable pension income for a tax year is the full amount of the pension accruing in that year irrespective of when any amount is actually paid.

Person liable for tax

572

If section 569 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

Chapter 4 — Foreign pensions: general rules

Foreign pensions

573

(1) This section applies to any pension paid by or on behalf of a person who is outside the United Kingdom to a person who is resident in the United Kingdom.

(2) But this section does not apply to a pension if any provision of Chapters 5 to 14 of this Part applies to it.

(2A) This section does not apply to pension within section 574(1)(ba) if—

(a) the pension is paid in respect of a deceased member of a pension scheme who had not reached the age of 75 at the date of death, and

(b) no pension payments to the person entitled to the pension were made before 6 April 2015 in respect of the deceased member out of any of the following—

(i) the fund from which the pension is paid, and

(ii) any fund represented (to any extent) by that fund.

(2B) This section does not apply to pension within section 574(1)(bb) if the pension is paid in respect of a deceased individual who had not reached the age of 75 at the date of death.

(2C) Subsection (2A) is subject to subsection (2D).

(2D) This section does apply to pension within section 574(1)(ba) paid in respect of a deceased member of a pension scheme who had not reached the age of 75 at the date of death if the pension is paid in respect of sums or assets held for the purposes of the pension scheme under which the pension is paid (“the paying scheme”) that would, if the paying scheme were a registered pension scheme, be sums or assets—

(a) representing unused uncrystallised funds (within the meaning of paragraph 27E(4) and (5) of Schedule 28 to FA 2004) in the deceased member's case, and

(b) designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, but

(c) not so designated before the end of the period of two years beginning with the earlier of the day on which the scheme manager of the paying scheme first knew of the member's death and the day on which the scheme manager could first reasonably have been expected to have known of it.

(2E) Chapter 17 of this Part provides exemptions for certain annuities (see sections 646D and 646E: certain beneficiaries' annuities purchased out of unused or drawdown funds).

(2F) See also paragraph 45A of Schedule 36 to FA 2004 (exemption in certain cases for payments on or after 6 April 2015 to beneficiaries under joint-life or similar annuities purchased before 6 April 2006).

(3) For pensions paid by or on behalf of a person who is in the United Kingdom, see Chapter 3 of this Part.

(4) This section also applies to a pension paid by or on behalf of a person who is outside the United Kingdom to a person who is not resident in the United Kingdom if—

(a) the pension is a relevant lump sum paid under a pension scheme to that person in respect of a member of the scheme, and

(b) the member is, or immediately before the member's death was, resident in the United Kingdom.

“Pension”: interpretation

574

(1) For the purposes of this Chapter “pension” includes—

(a) an annuity under, or purchased with sums or assets held for the purposes of, or representing acquired rights under, a relevant non-UK scheme or an overseas pension scheme,

(aa) a relevant lump sum (see section 574A),

(b) an amount paid under a relevant non-UK scheme or an overseas pension scheme which, if the scheme were a registered pension scheme, would be income withdrawal ... (within the meaning of paragraph 7 of Schedule 28 to FA 2004),

(ba) an amount paid under a relevant non-UK scheme or an overseas pension scheme which, if the scheme were a registered pension scheme, would be dependants' income withdrawal or nominees' income withdrawal (within the meaning of paragraphs 21 and 27D of Schedule 28 to FA 2004),

(bb) an amount paid under a relevant non-UK scheme or an overseas pension scheme which, if the scheme were a registered pension scheme, would be successors' income withdrawal (within the meaning of paragraph 27J of Schedule 28 to FA 2004), and

(2) Condition A is that the pension is paid to—

(a) a former employee or a former office-holder,

(b) the widow or widower or surviving civil partner of a former employee or a former office-holder, or

(3) Condition B is that the pension is paid by or on behalf of—

(a) the person—

(i) who employed the former employee, or

(ii) under whom the former office-holder held the office, or

(b) the successors of that person.

(4) In this section—

“office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders;

“overseas pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(7) of that Act);

“relevant non-UK scheme” is to be read in accordance with paragraph 1(5) of Schedule 34 to FA 2004.

Taxable pension income

575

(1) If section 573 applies, the taxable pension income for a tax year is the full amount of the pension income arising in the tax year, but subject to subsections (1A) ... and (3) and section 576A.

(1A) If the person liable for the tax under this Part is an individual and the tax year is a split year as respects that individual, the taxable pension income for the tax year is the full amount of the pension income arising in the UK part of the year, subject to subsection (3) and section 576A.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The full amount of the pension income arising in the tax year, or (as the case may be) the UK part of the tax year, is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of ITTOIA 2005 (relevant foreign income: remittance basis and deductions and reliefs).

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) See also Chapter 4 of that Part (unremittable income).

Person liable for tax

576

If section 573 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

577

(1) This section applies to—

the state pension,

graduated retirement benefit,

industrial death benefit,

widowed mother’s allowance,

widowed parent’s allowance, and

widow’s pension.

(1A) But this section does not apply to any social security pension lump sum (within the meaning of section 7 of F(No.2)A 2005).

(2) In this section—

“state pension” means any pension payable under— any provision of Part 1 of the Pensions Act 2014 or any corresponding provision under the law of Northern Ireland, section 44, 48A, 48AA, 48B, 48BB, 51 or 78 of SSCBA 1992, orsection 44, 48A, 48B, 48BB, 51 or 78 of SSCB(NI)A 1992 or any provision under the law of Northern Ireland that corresponds to section 48AA of SSCBA 1992;

“graduated retirement benefit” means any benefit payable under—section 36 or 37 of the National Insurance Act 1965 (c. 51), orsection 35 or 36 of the National Insurance Act (Northern Ireland) 1966 (c. 6 (N.I.));

“industrial death benefit” means any benefit payable under—section 94 of, and Part 6 of Schedule 7 to, SSCBA 1992, orsection 94 of, and Part 6 of Schedule 7 to, SSCB(NI)A 1992;

“widowed mother’s allowance” means any allowance payable under—section 37 of SSCBA 1992, orsection 37 of SSCB(NI)A 1992;

“widowed parent’s allowance” means any allowance payable under—section 39A of SSCBA 1992, orsection 39A of SSCB(NI)A 1992;

“widow’s pension” means any pension payable under—section 38 of SSCBA 1992, orsection 38 of SSCB(NI)A 1992.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Chapter 17 of this Part provides a partial exemption for a pension to which this section applies in respect of any part of the pension which is attributable to an increase in respect of a child (see section 645).

Taxable pension income

578

If section 577 applies, the taxable pension income for a tax year is the full amount of the pension, benefit or allowance accruing in that year irrespective of when any amount is actually paid.

Person liable for tax

579

If section 577 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension, benefit or allowance.

Chapter 6 — Approved retirement benefits schemes

Pensions and annuities

580

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

581

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

582

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unauthorised payments

583

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

584

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

585

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation etc.

Meaning of “retirement benefits scheme” etc.

586

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Application to marine pilots' benefit fund

587

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of “employee” and “ex-spouse”

588

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regulations

589

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 7 — Former approved superannuation funds

Annuities

590

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

591

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

592

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unauthorised payments

Unauthorised payments: application of section 583

593

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation

Meaning of “former approved superannuation fund”

594

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 8 — Approved personal pension schemes

Annuities

595

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

596

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

597

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income withdrawals

598

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

599

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

600

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unauthorised personal pension payments

601

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

602

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

603

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation

604

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 9 — Retirement annuity contracts

Annuities

605

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of “retirement annuity contract”

606

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

607

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

608

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annuities for the benefit of dependants

609

(1) This section applies to any annuity which was granted for consideration consisting in whole or in part of sums —

(a) which, in the tax year 2012-13 or an earlier tax year, satisfied the conditions for relief under section 273 of ICTA or section 459 of ITA 2007 (obligatory contributions to secure an annuity for the benefit of dependants), or

(b) which fall within subsection (3)

(2) But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(3) A sum falls within this subsection if—

(a) in the tax year 2013-14 or a later tax year, the sum is paid by an individual, or is deducted from an individual's earnings, under an Act or the individual's terms and conditions of employment,

(b) the sum is for the purpose of—

(i) securing a deferred annuity after the individual's death for the individual's surviving spouse or civil partner, or

(ii) making provision after the individual's death for the individual's children, and

(i) is UK resident for the tax year in which the sum is paid or deducted, or

(ii) at any time in that tax year, falls within any of paragraphs (a) to (f) of section 460(3) of ITA 2007 (matters relating to residence).

(4) Subsection (3)(a) does not cover contributions paid by a person under—

(a) Part 1 of the Social Security Contributions and Benefits Act 1992, or

(b) Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

(5) In subsection (3)(a) “earnings” has the meaning given by section 62.

Annuities under sponsored superannuation schemes

610

(1) This section applies to—

(a) any annuity paid under an occupational pension scheme that is not a registered pension scheme, and

(b) any annuity acquired using funds held for the purposes of such an occupational pension scheme.

(2) But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(3) This section does not apply to an annuity to which Chapter 5A of this Part applies.

(4) In this section “occupational pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(5) of that Act).

Annuities in recognition of another’s services

611

(1) This section applies to any annuity purchased by any person in recognition of another person’s services in any office or employment.

(2) But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(3) This section does not apply to an annuity to which Chapter 5A of this Part applies.

(4) For the purposes of this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Taxable pension income: UK annuities

612

(1) The taxable pension income for an annuity to which section 609, 610 or 611 applies is determined in accordance with this section if the annuity arises from a source in the United Kingdom.

(2) The taxable pension income for a tax year is the full amount of the annuity arising in that year.

Taxable pension income: foreign annuities

613

(1) The taxable pension income for an annuity to which section 609, 610 or 611 applies is determined in accordance with this section if the annuity arises from a source outside the United Kingdom.

(2) The taxable pension income for a tax year is the full amount of the annuity arising in the tax year, but subject to subsection (4).

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The annuity is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of ITTOIA 2005 (relevant foreign income: remittance basis and deductions and reliefs).

(5) But if the annuity arises in the Republic of Ireland, section 839 of that Act (annual payments payable out of relevant foreign income) applies with the omission of conditions B1 and B2 (and the reference to them in subsection (1)) and subsection (5)(a).

(6) See also Chapter 4 of that Part (unremittable income).

Person liable for tax

614

If section 609, 610 or 611 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the annuity.

Chapter 11 — Certain overseas government pensions paid in the UK

Certain overseas government pensions paid in the United Kingdom

615

(1) This section applies to a pension if conditions A, B and C are met.

(2) Condition A is that the pension—

(a) is payable—

(i) to a person who has been employed in overseas government service, or

(ii) to the widow, widower, surviving civil partner, child, relative or dependant of a person who has been employed in overseas government service, and

(b) is payable in respect of that service.

(3) Condition B is that the pension—

(a) is payable in the United Kingdom, and

(b) is payable to a person who is resident in the United Kingdom.

(4) Condition C is that the pension is payable by or on behalf of the government of—

(a) a country which forms part of Her Majesty’s dominions,

(b) any other country which is for the time being mentioned in Schedule 3 to the British Nationality Act 1981 (c. 61), or

(5) But condition C is not met if the pension is payable out of the public revenue of the United Kingdom or Northern Ireland.

(6) In condition A the references to a person being employed in overseas government service are to the person being employed outside the United Kingdom—

(a) in the service of the Crown, or

(b) in service under the government of a country or territory which falls within subsection (4).

(7) In this Chapter “pension” includes a pension which is paid voluntarily or is capable of being discontinued.

Taxable pension income

616

If section 615 applies, the taxable pension income for a tax year is the full amount of the pension accruing in that year irrespective of when any amount is actually paid.

Deduction allowed from taxable pension income

617

A deduction of 10% is allowed from an amount of taxable pension income determined under section 616 (see section 567).

Person liable for tax

618

If section 615 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

Chapter 12 — House of Commons Members' Fund

The House of Commons Members' Fund

619

This section applies to any periodical payment granted out of—

(a) the House of Commons Members' Fund,

(b) sums appropriated from that Fund, or

Meaning of “House of Commons Members' Fund”

620

In this Chapter “House of Commons Members' Fund” means the fund with that name specified in section 1 of the House of Commons Members' Fund Act 2016.

Taxable pension income

621

If section 619 applies, the taxable pension income for a tax year is the total amount of the payments made in that year.

Person liable for tax

622

If section 619 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the payments.

Chapter 13 — Return of surplus employee additional voluntary contributions

Return of surplus employee additional voluntary contributions

623

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxable pension income

624

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable for tax

625

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income tax treated as paid

626

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of “grossing up”

627

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation

628

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 14 — Pre-1973 pensions paid under the Overseas Pensions Act 1973

Pre-1973 pensions paid under the Overseas Pensions Act 1973

629

(1) This section applies to a pension if—

(a) it is paid under section 1 of OPA 1973 (whether or not paid out of a fund established under a scheme made under that section),

(b) it is a pre-1973 pension, and

(i) the original pensioner, or

(ii) the widow or widower of the original pensioner.

(2) But this section does not apply to a part of a pension which is paid because the Pensions (Increase) Act 1971 (c. 56) applies to it (and accordingly section 569 applies to that part of the pension).

(3) Chapter 18 of this Part provides an exemption where a pension to which this section applies is paid to a person who is not resident in the United Kingdom (see sections 647 and 651).

Interpretation

630

(1) For the purposes of this Chapter a person is the “original pensioner” in relation to a pension if—

(a) the pension is payable by virtue of the person’s service, and

(b) the person retired from that service before 6th April 1973.

(2) For the purposes of this Chapter a pension is a “pre-1973 pension” if, immediately before 6th April 1973—

(a) the pension was payable to—

(i) the original pensioner, or

(ii) the widow or widower of the original pensioner, and

(b) that person was resident in the United Kingdom.

Taxable pension income

631

(1) If section 629 applies, the taxable pension income for a tax year is the full amount of the pension income arising in the tax year .

(2) The full amount of the pension income arising in the tax year is to be calculated on the basis that the pension is 90% of its actual amount.

(3) The pension income is treated as relevant foreign income for the purposes of section 838 of that Act (expenses attributable to collection or payment of relevant foreign income).

Person liable for tax

632

If section 629 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension.

Chapter 15 — Voluntary annual payments

Voluntary annual payments

633

(1) This section applies to an annual payment which—

(a) is paid voluntarily, or

(b) is capable of being discontinued,

if conditions A and B are met.

(2) Condition A is that the payment is paid to—

(a) a former employee or a former office-holder,

(b) the widow or widower or surviving civil partner of a former employee or former office-holder, or

(3) Condition B is that the payment is paid by or on behalf of—

(a) the person—

(i) who employed the former employee, or

(ii) under whom the former office-holder held the office, or

(b) the successors of that person.

(4) But this section applies to a payment which is paid by or on a behalf of a person who is outside the United Kingdom only if it is paid to a person resident in the United Kingdom.

(5) In this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

Taxable pension income: UK voluntary annual payments

634

(1) The taxable pension income for payments to which section 633 applies is determined in accordance with this section if the payments are made by or on behalf of a person who is in the United Kingdom.

(2) The taxable pension income for a tax year is the full amount of the payments accruing in that year irrespective of when any amount is actually paid.

Taxable pension income: foreign voluntary annual payments

635

(1) The taxable pension income for payments to which section 633 applies is determined in accordance with this section if the payments are made by or on behalf of a person who is outside the United Kingdom.

(2) The taxable pension income for a tax year is the full amount of the pension income arising in the tax year, but subject to subsection (4) .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The full amount of the pension income arising in the tax year is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of ITTOIA 2005 (relevant foreign income: remittance basis and deductions and reliefs).

(5) But if that pension income arises in the Republic of Ireland, section 839 of that Act (annual payments payable out of relevant foreign income) applies with the omission of conditions B1 and B2 (and the reference to them in subsection (1)) and subsection (5)(a).

(6) See also Chapter 4 of that Part (unremittable income).

Person liable for tax

636

If section 633 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the payment.

Chapter 16 — Exemption for certain lump sums

Exemption for lump sums provided under certain pension schemes etc.

637

(1) This Chapter makes provision about the income tax treatment of authorised lump sums and authorised lump sum death benefits.

(2) In this Chapter—

(a) “authorised lump sum” means a lump sum permitted by the lump sum rule in section 166 of FA 2004 to be paid by a registered pension scheme to a member of the scheme;

(b) “authorised lump sum death benefit” means a lump sum death benefit permitted by the lump sum death benefit rule in section 168 of that Act to be paid by a registered pension scheme in respect of a member of the scheme.

(3) Expressions used in this Chapter and Part 4 of FA 2004 (pensions etc) have the same meaning in this Chapter as in that Part.

Chapter 17 — Exemptions: any taxpayer

Awards for bravery

638

(1) No liability to income tax arises on a pension or annuity if it is paid to the holder of an award for bravery in respect of the award.

(2) In this section “award for bravery” means—

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.

Pensions in respect of death due to military or war service

639

(1) No liability to income tax arises on these pensions and allowances—

(a) a pension or allowance payable by or on behalf of the Ministry of Defence under so much of instrument specified in subsection (2), as relates to death due to—

(i) service in the armed forces of the Crown,

(ii) wartime service in the merchant navy, or

(iii) war injuries;

(b) a pension or allowance—

(i) payable by the Ministry of Defence in respect of death due to peacetime service in the armed forces of the Crown before 3rd September 1939, and

(ii) payable at rates, and subject to conditions, similar to those of a pension within paragraph (a);

(i) payable under the law of a country other than the United Kingdom, and

(ii) of a character substantially similar to a pension within paragraph (a) or (b).

(2) The instruments referred to in subsection (1)(a) are—

Defence (Local Defence Volunteers) Regulations 1940 (S.R. & O. 1940/748),

War Pensions (Coastguards) Scheme 1944 (S.R. & O. 1944/500),

War Pensions (Naval Auxiliary Personnel) Scheme 1964 (S.I. 1964/1985),

Pensions (Polish Forces) Scheme 1964 (S.I. 1964/2007),

War Pensions (Mercantile Marine) Scheme 1964 (S.I. 1964/2058),

Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Home Guard (1964 Cmnd. 2563),

Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Home Guard after 27th April 1952 (1964 Cmnd. 2564),

Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment (1971 Cmnd. 4567),

Personal Injuries (Civilians) Scheme 1983 (S.I. 1983/686),

Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983 (S.I. 1983/883).

(3) The Treasury may by order amend subsection (2).

Exemption under section 639 where income withheld

640

(1) This section applies if—

(a) an individual is entitled to both of the following—

(i) a pension or allowance mentioned in section 639 (“pension A”), and

(ii) any other pension or allowance (“pension B”), and

(b) the whole or a part of pension A is withheld because of the individual’s entitlement to pension B.

(2) In such a case, an amount of pension B equal to the withheld amount of pension A is treated for the purposes of section 639 as part of pension A.

Wounds and disability pensions

641

(1) No liability to income tax arises on—

(a) a wounds pension granted to a member of the armed forces of the Crown;

(b) retired pay of a disabled officer granted on account of medical unfitness attributable to or aggravated by service in the armed forces of the Crown;

(c) a disablement or disability pension granted to a member of the armed forces of the Crown, other than a commissioned officer, on account of medical unfitness attributable to or aggravated by service in the armed forces of the Crown;

(d) a disablement pension granted to a person who has been employed in the nursing services of any of the armed forces of the Crown on account of medical unfitness attributable to or aggravated by service in the armed forces of the Crown;

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f) an injury or disablement pension payable under any War Risks Compensation Scheme for the Mercantile marine;

(g) a pension—

(i) granted to a person on account of disablement, and

(ii) payable under any scheme made under section 3, 4 or 5 of the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 (c. 83).

(h) a benefit under a scheme established by an order under section 1(2) of the Armed Forces (Pensions and Compensation) Act 2004 payable to a person by reason of his illness or injury—

(i) by way of a lump sum, or

(ii) following the termination of the person's service in the armed forces or reserve forces.

(2) But if the Secretary of State certifies that a pension or retired pay of a kind listed in subsection (1) is only partly attributable to disablement or disability, that subsection applies only to the part attributable to disablement or disability.

Compensation for National-Socialist persecution

642

No liability to income tax arises on a pension or annuity which is payable under any special provision for victims of National-Socialist persecution which is made by the law of—

(a) the Federal Republic of Germany or any part of it, or

(b) Austria.

Malawi, Trinidad and Tobago and Zambia government pensions

643

(1) No liability to income tax arises on—

(a) a Malawi government pension,

(b) a Trinidad and Tobago government pension, or

if conditions A, B and C are met.

(2) Condition A is that the pension is paid to—

(a) the original pensioner, or

(b) the widow or widower or surviving civil partner of the original pensioner.

(3) Condition B is that the pension is now paid under section 1 of OPA 1973 (whether or not it is paid out of a fund established under a scheme made under that section).

(4) Condition C is that, at the time the pension is paid, provision is made by double taxation relief arrangements which would exempt the pension from income tax in the United Kingdom if the pension were still paid by the relevant government (rather than under section 1 of OPA 1973).

(5) Subsection (1) does not apply to any part of a pension which is paid because the Pensions (Increase) Act 1971 (c. 56) applies to it.

(6) In this section—

“double taxation relief arrangements” means arrangements which have effect under section 2(1) of TIOPA 2010;

“Malawi government pension” means a pension payable by the government of Malawi for services rendered—to the government of Malawi, orto the government of the Federation of Rhodesia and Nyasaland,in the discharge of government functions;

“Trinidad and Tobago government pension” means a pension payable by the government of Trinidad and Tobago for services rendered to the government of Trinidad and Tobago in the discharge of governmental functions;

“Zambia government pension” means a pension payable by the government of Zambia for services rendered—to the government of Zambia,to the government of Northern Rhodesia, orto the government of the Federation of Rhodesia and Nyasaland,in the discharge of governmental functions.

(7) For the purposes of this section a person is the “original pensioner” in relation to a pension if—

(a) the pension is payable by virtue of the person’s service, and

(b) the person retired from that service before 6th April 1973.

Pensions payable where employment ceased due to disablement

644

(1) No liability to income tax arises on the exempt amount of a disablement pension.

(2) For the purposes of this section a pension is a “disablement pension” if—

(a) the pension is payable because a person has ceased to hold an employment or office because of disablement, and

(b) that disablement is attributable to—

(i) performance of the duties of the employment or office, or

(ii) war injuries.

But “disablement pension” does not include any pension to which section 579A applies.

(3) The exempt amount of a disablement pension is determined in accordance with the following steps.

Step 1

Determine what pension would have been payable if—

(a) the person had ceased to hold the employment or office because of the disablement mentioned in subsection (2)(a), but

(b) the disablement had not been attributable to—

(i) performance of the duties of the employment or office, or

(ii) war injuries.

Step 2

If no pension would have been payable, the exempt amount is the amount of the disablement pension.

If a pension of a smaller amount than the disablement pension would have been payable, the exempt amount is the amount by which the disablement pension exceeds the smaller amount.

In any other case, the exempt amount is nil.

(4) For the purposes of this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

645

(1) No liability to income tax arises on a part of a social security pension which is attributable to an increase in respect of a child.

(2) In this section “social security pension” means—

(a) any pension, benefit or allowance to which section 577 applies, and

(b) any pension, benefit or allowance which—

(i) is payable under the law of a country or territory outside the United Kingdom, and

(ii) is substantially similar in character to a pension, benefit or allowance to which section 577 applies.

Former miners etc: coal and allowances in lieu of coal

646

(1) No liability to income tax arises on—

(a) the provision of coal or smokeless fuel—

(i) to a former colliery worker, or

(ii) to the widow or widower or surviving civil partner of a former colliery worker, or

(b) any allowance paid to such a person in lieu of such provision,

if the condition in subsection (2) is met.

(2) That condition is that the amount of coal or fuel provided or in respect of which the allowance is paid does not substantially exceed the amount reasonably required for personal use.

(3) That condition is assumed to be met unless the contrary is shown.

(4) In this section “former colliery worker” means—

(a) any person who has ceased to be employed as a coal miner, or

(b) any other person who has ceased to be employed at or about a colliery otherwise than in clerical, administrative or technical work.

Chapter 18 — Exemptions: Non-UK resident taxpayers

Introduction and meaning of “foreign residence condition” etc.

647

(1) The provisions of this Part provide that no liability to income tax arises on certain kinds of pensions if the foreign residence condition is met.

(2) The foreign residence condition is met in relation to a pension if the pension is payable to a person who is not resident in the United Kingdom.

(3) For the purposes of the foreign residence condition, a person is taken to be not resident in the United Kingdom only if—

(a) a person makes a claim to the Commissioners for Her Majesty’s Revenue and Customs that the person is not resident, and

(b) the Commissioners are satisfied that the person is not resident.

(4) In this Chapter “pension” includes—

(a) a gratuity or any sum payable on or in respect of death,

(b) a return of contributions, and

The Central African Pension Fund

648

(1) No liability to income tax arises on a pension which is paid from the Central African Pension Fund if the foreign residence condition is met.

(2) In this section “the Central African Pension Fund” means the fund established under that name by section 24 of the Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963 (S.I. 1963/2085).

Commonwealth government pensions

649

(1) No liability to income tax arises on a pension paid out of a fund which is established—

(a) in the United Kingdom,

(b) by a Commonwealth government,

if the foreign residence condition is met.

(2) In this section “Commonwealth government” means—

(a) the government of a territory or country mentioned in subsection (3),

(b) the government of any part of a territory or country mentioned in subsection (3), or

(3) The territories and countries referred to in subsection (2) are—

(a) a country mentioned in Schedule 3 to the British Nationality Act 1981 (c. 61) apart from Australia, Canada, New Zealand, India, Sri Lanka and Cyprus,

(b) an associated state,

(d) a protectorate,

(e) a protected state, and

(f) a United Kingdom trust territory.

(4) In subsection (2)(c) the reference to a government constituted for two or more of the territories or countries mentioned in subsection (3) includes a reference to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more of those territories or countries.

(5) In subsection (3)(f) “United Kingdom trust territory” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.

Oversea Superannuation Scheme

650

(1) No liability to income tax arises on a pension which is paid under the Oversea Superannuation Scheme (formerly known as the Colonial Superannuation Scheme) if the foreign residence condition is met.

(2) For the purposes of subsection (1) a pension is paid under the Oversea Superannuation Scheme if—

(a) the pension is paid under the Scheme as it has effect (by reason of section 2(4A) of OPA 1973) as a scheme under section 2 of OPA 1973, or

(b) the pension is paid under a scheme which—

(i) the Secretary of State has made under section 2(1) of OPA 1973, and

(ii) corresponds to the Oversea Superannuation Scheme.

Overseas Pensions Act 1973

651

(1) No liability to income tax arises on a pension which is paid under section 1 of OPA 1973 if the foreign residence condition is met.

(2) Subsection (1) applies whether or not the pension is paid out of a fund established under a scheme made under section 1 of OPA 1973.

(3) But subsection (1) does not apply to any part of a pension paid because the Pensions (Increase) Acts apply to it.

(4) In this section “the Pensions (Increase) Acts” means—

(a) the Pensions (Increase) Act 1971 (c. 56), and

(b) any Act passed after that Act for purposes which correspond to the purposes of that Act.

Overseas Service Act 1958

652

(1) No liability to income tax arises on a pension—

(a) which is paid under the authority of the Overseas Service Act 1958 (c. 14), and

(b) which the Secretary of State certifies to be attributable to the employment of a person in the public services of an overseas territory,

if the foreign residence condition is met.

(2) If the Secretary of State certifies that only part of a pension paid under the authority of the 1958 Act is attributable to the employment of a person in the public services of an overseas territory, subsection (1) applies only to that part of the pension.

(3) For the purposes of subsections (1) and (2) a pension is paid under the authority of the 1958 Act if condition A or B is met.

(4) Condition A is that the pension is paid under either of the following—

(a) an order made under section 2 of the 1958 Act, or

(b) section 4(2) of the 1958 Act,

as it has effect (by reason of section 2(3) of OPA 1973) as a scheme under section 2 of OPA 1973.

(5) Condition B is that the pension is paid under a scheme which the Secretary of State—

(a) has made under section 2(1) of OPA 1973, and

(b) has certified to correspond to—

(i) an order made under section 2 of the 1958 Act, or

(ii) section 4(2) of the 1958 Act.

(6) For the purposes of this section, a person is taken to be employed in the public service of an overseas territory at any time when—

(a) the person is employed in any capacity under the government of that territory, or under any municipal or other local authority in it,

(b) the person is employed in circumstances not falling within paragraph (a), by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or

(c) the person is the holder of a public office in that territory in circumstances not falling within paragraph (a) or (b).

(7) In subsection (6) references to the government of an overseas territory include references to—

(a) a government constituted for two or more overseas territories, and

(b) any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.

(8) In this section—

“the 1958 Act” means the Overseas Service Act 1958 (c. 14);

“certified” means certified for the purposes of ICTA 1970, ICTA or this Act.

Overseas Service Pensions Fund

653

(1) No liability to income tax arises on a pension which is paid out of the Overseas Service Pensions Fund if the foreign residence condition is met.

(2) In this section “the Overseas Service Pensions Fund” means the fund with that name established under section 7(1) of the Overseas Aid Act 1966 (c. 21).

(3) In this section “pension” includes not only the things mentioned in section 647(4) but also any sum payable in respect of ill-health.

The Pensions (India, Pakistan and Burma) Act 1955

654

(1) No liability to income tax arises on a pension paid under the authority of the Pensions (India, Pakistan and Burma) Act 1955 (c. 22) if the foreign residence condition is met.

(2) A pension is paid under the authority of the 1955 Act if—

(a) the pension is paid under the 1955 Act as it has effect (by reason of section 2(3) of OPA 1973) as a scheme under section 2 of OPA 1973, or

(b) the pension is paid under a scheme which the Secretary of State—

(i) has made under section 2(1) of OPA 1973, and

(ii) has certified to correspond to the provision made under the 1955 Act.

(3) This section does not apply to any part of a pension paid because the Pensions (Increase) Acts apply to it.

(4) In this section—

“the 1955 Act” means the Pensions (India, Pakistan and Burma) Act 1955 (c. 22);

“certified” means certified for the purposes of ICTA 1970, ICTA or this Act;

“the Pensions (Increase) Acts” means—the Pensions (Increase) Act 1971 (c. 56), andany Act passed after that Act for purposes which correspond to the purposes of that Act.

Chapter 1 — Introduction

Structure of Part 10

655

(1) The structure of this Part is as follows—

Chapter 2—

(a) imposes the charge to tax on social security income, and

(b) provides for deductions to be made from the amount of income chargeable;

Chapter 3 sets out the UK social security benefits which are charged to tax under this Part and identifies—

(a) the amount of income chargeable to tax for a tax year, and

(b) the person liable to pay any tax charged;

Chapters 4 and 5 deal with exemptions from the charge to tax on UK social security benefits (whether under this Part or any other provision);

Chapters 6 and 7 make provision about foreign benefits.

Chapter 8 makes provision for the high income child benefit charge.

(2) For other provisions about the taxation of social security benefits, see—

section 151 of FA 1996 (power for the Treasury to make orders about the taxation of benefits payable under Government pilot schemes);

section 781 of ITTOIA 2005 (exemption from income tax for payments under New Deal 50plus);

section 782 of ITTOIA 2005 (exemption from income tax for payments under employment zone programmes);

section 44 of FA 2016 (tax treatment of supplementary welfare payments: Northern Ireland);

section 13 of FA 2020 (power to exempt social security benefits from income tax) ;

section 27 of F(No. 2)A 2023 (power to clarify tax treatment of devolved social security benefits).

(3) For the charge to tax on social security pensions, see Part 9 (pension income).

656

(1) The charge to tax on social security income is a charge to tax on that income excluding any exempt income.

(2) “Exempt income” is social security income on which no liability to income tax arises as a result of any provision of Chapter 4, 5 or 7 of this Part.

This definition applies for the purposes of this Part.

657

(1) This section defines—

“social security income” for the purposes of the Tax Acts, and

“taxable benefits”, “Table A” and “Table B” for the purposes of this Part.

(2) “Social security income” means—

(a) the United Kingdom social security benefits listed in Table A,

(b) the United Kingdom social security benefits listed in Table B,

(d) the foreign benefits to which section 681(2) applies.

(3) “Taxable benefits” means—

(a) the United Kingdom social security benefits listed in Table A, and

(b) the foreign benefits to which section 678 applies.

(4) Subsections (2) and (3) are subject to section 660(2).

(5) “Table A” means Table A in section 660.

(6) “Table B” means Table B in section 677.

Amount charged to tax

658

(1) The amount of social security income which is charged to tax under this Part for a particular tax year is as follows.

(2) In relation to a taxable benefit, the amount charged to tax is the net taxable social security income for the tax year.

(3) The net taxable social security income for a taxable benefit for a tax year is given by the formula—

$$TSSI-PGD$where—TSSI means the amount of taxable social security income for that benefit for that year (see subsections (4) to (7)), andPGD means the amount of the deduction (if any) allowed from the benefit under Part 12 (payroll giving).$

(4) In relation to bereavement allowance, carer’s allowance, carer's allowance supplement, carer support payment, contributory employment and support allowance, incapacity benefit, income support, Scottish Carer Supplement, welfare supplementary payments payable pursuant to the loss of contributory employment and support allowance and welfare supplementary payments payable pursuant to the loss of, or a reduction in the amount payable of, income support (which are listed in Table A), the amount of taxable social security income is determined in accordance with section 661.

(5) In relation to any other benefit listed in Table A, the amount of taxable social security income is the amount of the benefit that falls to be charged to tax.

(6) In relation to foreign benefits to which section 678 applies, the amount of taxable social security income is determined in accordance with section 679.

(7) In determining for the purposes of this Act the amount of taxable social security income, any exempt income is to be excluded.

Person liable for tax

659

The person liable for any tax charged under this Part is identified in—

(a) section 662 (UK benefits), or

(b) section 680 (foreign benefits).

Taxable benefits: UK benefits – Table A

660

(1) This is Table A—

Social security benefit	Payable under	Payable under
. . .	. . .	. . .
. . .	. . .	. . .
Bereavement allowance	. . .	. . .
Bereavement allowance	. . .	. . .
Carer’s allowance	SSCBA 1992	Section 70
Carer’s allowance	SSCB(NI)A 1992	Section 70
Carer's allowance supplement	SS(S)A 2018	Section 81
Carer support payment	CA(CSP)(S)R 2023	Regulation 3
Employment and support allowance	WRA 2007	Section 1(2)(a)
Employment and support allowance	Any provision made for Northern Ireland which corresponds to section 1(2)(a) of WRA 2007	Any provision made for Northern Ireland which corresponds to section 1(2)(a) of WRA 2007
Incapacity benefit	SSCBA 1992	Section 30A(1) or (5), 40 or 41
Incapacity benefit	SSCB(NI)A 1992	Section 30A(1) or (5), 40 or 41
Income support	SSCBA 1992	Section 124
Income support	SSCB(NI)A 1992	Section 123
Jobseeker’s allowance	JSA 1995	Section 1
Jobseeker’s allowance	JS(NI)O 1995	Article 3
Scottish Carer Supplement	CA(CSP)(S)R 2023	Regulation 14A
Statutory paternity pay	SSCBA 1992	Section 171ZA or 171ZB
Statutory paternity pay	Any provision made for Northern Ireland which corresponds to section 171ZA or 171ZB of SSCBA 1992.	Any provision made for Northern Ireland which corresponds to section 171ZA or 171ZB of SSCBA 1992.
Statutory adoption pay	SSCBA 1992	Section 171ZL
Statutory adoption pay	Any provision made for Northern Ireland which corresponds to section 171ZL of SSCBA 1992	Any provision made for Northern Ireland which corresponds to section 171ZL of SSCBA 1992
Statutory maternity pay	SSCBA 1992	Section 164
Statutory maternity pay	SSCB(NI)A 1992	Section 160
Statutory shared parental pay	SSCBA 1992 Any provision made for Northern Ireland which corresponds to section 171ZU or 171ZV of SSCBA 1992	Section 171ZU or 171ZV
Statutory parental bereavement pay	SSCBA 1992 Any provision made for Northern Ireland which corresponds to section 171ZZ6 of SSCBA 1992	Section 171ZZ6
Statutory neonatal care pay	SSCBA 1992	Section 171ZZ16
Statutory neonatal care pay	Any provision made for Northern Ireland which corresponds to section 171ZZ16 of SSCBA 1992	Any provision made for Northern Ireland which corresponds to section 171ZZ16 of SSCBA 1992
. . .	. . .	. . .
Statutory sick pay	SSCBA 1992	Section 151
Statutory sick pay	SSCB(NI)A 1992	Section 147.
Welfare supplementary payment payable pursuant to the loss of carer’s allowance	WSP(LCP)R(NI) 2016	Regulation 4
Welfare supplementary payment payable pursuant to the loss of contributory employment and support allowance	WSPR(NI) 2016	Regulation 7
Welfare supplementary payment payable pursuant to the loss of, or a reduction of the amount payable of, income support	WSP(LCP)R(NI) 2016	Regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(c)) or regulation 12
	WSP(LDRP)R(NI) 2016	Regulation 4, 5 or 6
Welfare supplementary payment payable pursuant to a reduction of the amount payable of jobseekers allowance	WSP(LCP)R(NI) 2016	Regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(a))
	WSP(LDRP)R(NI) 2016	Regulation 11, 12, 13, 14 or 15

(2) A benefit listed below is not “social security income” or a “taxable benefit” if it is charged to tax under another Part of this Act—

... statutory paternity pay;

statutory adoption pay;

statutory maternity pay;

statutory shared parental pay;

statutory parental bereavement pay;

statutory neonatal care pay;

statutory sick pay.

661

(1) This section applies in relation to each of the following taxable benefits listed in Table A—

bereavement allowance,

carer’s allowance,

carer's allowance supplement,

carer support payment,

contributory employment and support allowance,

incapacity benefit, ...

income support.

Scottish Carer Supplement,

welfare supplementary payments payable pursuant to the loss of contributory employment and support allowance, and

welfare supplementary payments payable pursuant to the loss of, or a reduction of the amount payable of, income support.

(2) The amount of taxable social security income for a taxable benefit for a tax year is the full amount of the benefit accruing in the tax year irrespective of when any amount is actually paid.

Person liable for tax

662

The person liable for any tax charged under this Part on a taxable benefit listed in Table A is the person receiving or entitled to the benefit.

Incapacity benefit

Long-term incapacity benefit: previous entitlement to invalidity benefit

663

(1) No liability to income tax arises on long-term incapacity benefit if—

(a) a person is entitled to the benefit for a day of incapacity for work which falls in a period of incapacity for work which is treated for the purposes of that benefit as having begun before 13th April 1995, and

(b) the part of that period which is treated as having fallen before that date includes a day for which that person was entitled to invalidity benefit.

(2) In this section—

“invalidity benefit” means invalidity benefit under—Part 2 of SSCBA 1992, orPart 2 of SSCB(NI)A 1992;

“long-term incapacity benefit” means incapacity benefit payable under—section 30A(5), 40 or 41 of SSCBA 1992, orsection 30A(5), 40 or 41 of SSCB(NI)A 1992.

Short-term incapacity benefit not payable at the higher rate

664

(1) No liability to income tax arises on short-term incapacity benefit unless it is payable at the higher rate.

(2) In this section—

(a) “short-term incapacity benefit” means incapacity benefit payable under—

(i) section 30A(1) of SSCBA 1992, or

(ii) section 30A(1) of SSCB(NI)A 1992;

(b) the reference to short-term incapacity benefit payable at the higher rate is to be construed in accordance with—

(i) section 30B of SSCBA 1992, or

(ii) section 30B of SSCB(NI)A 1992.

Income support and relevant welfare supplementary payments

Exempt unless payable to member of couple involved in trade dispute

665

(1) No liability to income tax arises on income support unless—

(a) the income support is payable to one member of a ... couple (“the claimant”), and

(b) section 126 of SSCBA 1992 or section 125 of SSCB(NI)A 1992 (trade disputes) applies to the claimant but not to the other member of the couple.

(2) In this section “couple” has the same meaning as in section 137(1) of SSCBA 1992 or section 133(1) of SSCB(NI)A 1992.

(3) No liability to income tax arises on a relevant welfare supplementary payment unless the whole or part of the payment relates to a period in which the claimant was prevented from being entitled to jobseeker’s allowance by–

(a) section 14 of the Jobseekers Act 1995 (trade disputes), or

(b) Article 16 of the Jobseekers (Northern Ireland) Order 1995 (trade disputes)

or would have been so prevented if otherwise entitled to that benefit.

(4) Where part of a relevant welfare supplementary payment relates to such a period no liability to income tax arises on the part that does not relate to such a period.

Child maintenance bonus

666

No liability to income tax arises on a part of income support which is attributable to a child maintenance bonus (within the meaning of section 10 of CSA 1995 or Article 4 of CS(NI)O 1995).

Amounts in excess of taxable maximum

667

(1) If the amount of income support and relevant welfare supplementary payments paid to a person (“the claimant”) for a week or a part of a week exceeds the claimant’s taxable maximum for that period, no liability to income tax arises on the excess.

(2) The claimant’s taxable maximum for a period is determined–

(a) under section 668(1), (2) and (3) where the claimant is a member of a couple, and

(b) under section 668(2A) and (3) where the claimant is not a member of a couple.

Taxable maximum

668

(1) A claimant’s taxable maximum for a week is determined under this subsection if the applicable amount for the purpose of calculating the income support consists only of an amount in respect of the relevant couple.

The taxable maximum is equal to one half of the applicable amount.

(2) A claimant’s taxable maximum for a week is determined under this subsection if the applicable amount includes amounts that are not in respect of the relevant couple.

The taxable maximum is equal to one half of the amount which is included in the applicable amount in respect of the relevant couple.

(2A) A claimant’s taxable maximum for a week is determined under this subsection if the claimant is not a member of a couple.

The taxable maximum is equal to the applicable amount.

(3) A claimant’s taxable maximum for a part of a week is determined as follows—

Step 1

Assume that the income support is paid to the claimant for the whole of, rather than part of, the week.

Step 2

Determine under subsection (1) or (2) what the claimant’s taxable maximum for that week would be on that assumption.

Step 3

Determine the claimant’s taxable maximum for the part of the week using this formula—

$$N7×TMW$where—N is the number of days in the part of the week for which the claimant is actually paid the income support, andTMW is the taxable maximum for the whole week determined under step 2.$

Interpretation

669

(A1) In sections 665 and 667 “relevant welfare supplementary payment” means a payment to which a person is entitled under–

(a) regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(c)) or regulation 12 of WSP(LCP)R(NI) 2016, or

(b) regulation 4 , 5 or 6 of WSP(LDRP)R(NI) 2016.

(1) In section 668, except in relation to Northern Ireland—

“applicable amount” means the amount prescribed in relation to income support in regulations made under section 135 of SSCBA 1992;

“couple” has the same meaning as in section 137(1) of SSCBA 1992

(2) In section 668, in relation to Northern Ireland—

“applicable amount” means the amount prescribed in relation to income support in regulations made under section 131 of SSCB(NI)A 1992;

“couple” has the same meaning as in section 133(1) of SSCB(NI)A 1992

(3) In section 668 “relevant couple”, in relation to a claimant, means the ... couple of which the claimant is a member.

Jobseeker’s allowance and relevant welfare supplementary payments

Child maintenance bonus

670

No liability to income tax arises on a part of a jobseeker’s allowance which is attributable to a child maintenance bonus (within the meaning of section 10 of CSA 1995 or Article 4 of CS(NI)O 1995).

Amounts in excess of taxable maximum

671

(1) If the amount of jobseeker’s allowance and relevant welfare supplementary payments paid to a person (“the claimant”) for a week or a part of a week exceeds the claimant’s taxable maximum for that period, no liability to income tax arises on the excess.

(2) The claimant’s taxable maximum for a period is determined under sections 672 to 674.

Taxable maximum: general

672

(1) A claimant’s taxable maximum for a week is determined—

(a) under section 673, if the claimant is paid an income-based jobseeker’s allowance for that week, or

(b) under section 674, if the claimant is paid a contribution-based jobseeker’s allowance for that week.

(2) A claimant’s taxable maximum for a part of a week is determined as follows—

Step 1

Assume that the jobseeker’s allowance is paid to the claimant for the whole of, rather than part of, the week.

Step 2

Determine under section 673 or 674 what the claimant’s taxable maximum for that week would be on that assumption.

Step 3

Determine the claimant’s taxable maximum for the part of the week using this formula—

$$M7×TMW$where—N is the number of days in the part of the week for which the claimant is actually paid the jobseeker’s allowance, andTMW is the taxable maximum for the whole week determined under step 2.$

Taxable maximum: income-based jobseeker’s allowance

673

(1) A claimant’s taxable maximum for a week is determined under this section if—

(a) the claimant is paid an income-based jobseeker’s allowance for that week, or

(b) the claimant is assumed under section 672(2) to be paid an income-based jobseeker’s allowance for that week.

(2) If the claimant is not a member of a ... couple, the claimant’s taxable maximum for the week is equal to the age-related amount which would be applicable to the claimant if a contribution-based jobseeker’s allowance were payable to the claimant for that week.

(3) If the claimant is a member of a ... couple, the claimant’s taxable maximum for the week is equal to the portion of the applicable amount which is included in the jobseeker’s allowance in respect of the couple for that week.

(4) But if—

(a) the claimant is a member of a ... couple, and

(b) the other member of that couple is prevented by section 14 of JSA 1995 or Article 16 of JS(NI)O 1995 (trade disputes) from being entitled to a jobseeker’s allowance,

the claimant’s taxable maximum for that week is equal to half the portion of the applicable amount which is included in the jobseeker’s allowance in respect of the couple for that week.

Taxable maximum: contribution-based jobseeker’s allowance

674

(1) A claimant’s taxable maximum for a week is determined under this section if—

(a) the claimant is paid a contribution-based jobseeker’s allowance for that week, or

(b) the claimant is assumed under section 672(2) to be paid a contribution-based jobseeker’s allowance for that week.

(2) If the claimant is not a member of a ... couple, the claimant’s taxable maximum for the week is equal to the age-related amount which is applicable to the claimant for that week.

(3) If the claimant is a member of a ... couple, the claimant’s taxable maximum for the week is equal to the portion of the applicable amount which would be included in the jobseeker’s allowance in respect of the couple if an income-based jobseeker’s allowance were payable to the claimant for that week.

Interpretation

675

(A1) In section 671 “relevant welfare supplementary payments” means payments to which a person is entitled under–

(a) regulation 8 (when the recipient is entitled to the payment by meeting the condition in regulation 8(2)(a)) of WSP(LCP)R(NI) 2016, or

(b) regulation 11, 12, 13, 14 or 15 of WSP(LDRP)R(NI) 2016.

(1) In sections 671 to 674, except in relation to Northern Ireland—

“age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under section 4 of JSA 1995;

“contribution-based jobseeker’s allowance” means a jobseeker’s allowance entitlement to which is based on the claimant satisfying conditions which include those set out in Article 4 of the JS(NI)O 1995;

“income-based jobseeker’s allowance” means a jobseeker’s allowance entitlement to which is based on the claimant satisfying conditions which include those set out in Article 5 of the JS(NI)O 1995 or a joint-claim jobseeker’s allowance (which means a jobseeker’s allowance entitlement to which arises by virtue of Article 3(2B) of the JS(NI)O 1995);

“couple” has the same meaning as in section 35(1) of JSA 1995

(2) In sections 671 to 674, in relation to Northern Ireland—

“age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under Article 6 of JS(NI)O 1995;

“contribution-based jobseeker’s allowance” and “income-based jobseeker’s allowance” have the same meaning as in Article 3(4) of JS(NI)O 1995;

“couple” has the same meaning as in Article 2(2) of JS(NI)O 1995

Increases in respect of children

676

No liability to income tax arises on a part of a taxable benefit listed in Table A which is attributable to an increase in respect of a child.

677

(1) No liability to income tax arises on the United Kingdom social security benefits listed in Table B.

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Income Tax (Earnings and Pensions) Act 2003

Amount charged to tax

567

Person liable for tax

568

Chapter 3 — United Kingdom pensions: general rules

United Kingdom pensions

569

“Pension”: interpretation

570

Taxable pension income

571

Person liable for tax

572

Chapter 4 — Foreign pensions: general rules

Foreign pensions

573

“Pension”: interpretation

574

Taxable pension income

575

Person liable for tax

576

Chapter 5 — United Kingdom social security pensions

United Kingdom social security pensions

577

Taxable pension income

578

Person liable for tax

579

Chapter 6 — Approved retirement benefits schemes

Pensions and annuities

Pensions and annuities

580

Taxable pension income

581

Person liable for tax

582

Unauthorised payments

Unauthorised payments

583

Taxable pension income

584

Person liable for tax

585

Interpretation etc.

Meaning of “retirement benefits scheme” etc.

586

Application to marine pilots' benefit fund

587

Meaning of “employee” and “ex-spouse”

588

Regulations

589

Chapter 7 — Former approved superannuation funds

Annuities

Annuities

590

Taxable pension income

591

Person liable for tax

592

Unauthorised payments

Unauthorised payments: application of section 583

593

Interpretation

Meaning of “former approved superannuation fund”

594

Chapter 8 — Approved personal pension schemes

Annuities

Annuities

595

Taxable pension income

596

Person liable for tax

597

Income withdrawals

Income withdrawals

598

Taxable pension income