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Income Tax (Earnings and Pensions) Act 2003

United Kingdom · statute

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In force since 2026-07-15, as the publisher states.

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Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 1,080 provisions
  1. Title and introductory text
  2. 1 Overview of contents of this Act
  3. 2 Abbreviations and general index in Schedule 1
  4. 3 Structure of employment income Parts
  5. 4 “Employment” for the purposes of the employment income Parts
  6. 5 Application to offices and office-holders
  7. 6 Nature of charge to tax on employment income
  8. 7 Meaning of “employment income”, “general earnings” and “specific employment income”
  9. 8 Meaning of “exempt income”
  10. 9 Amount of employment income charged to tax
  11. 10 Meaning of “taxable earnings” and “taxable specific income”
  12. 11 Calculation of “net taxable earnings”
  13. 12 Calculation of “net taxable specific income”
  14. 13 Person liable for tax
  15. 14 Taxable earnings under this Chapter: introduction
  16. 15 Earnings for year when employee UK resident
  17. 16 Meaning of earnings “for” a tax year
  18. 17 Treatment of earnings for year in which employment not held
  19. 18 Receipt of money earnings
  20. 19 Receipt of non-money earnings
  21. 20 Taxable earnings under this Chapter: introduction
  22. 21 Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings
  23. 22 Chargeable overseas earnings for year when remittance basis applied and employee outside section 26
  24. 23 Calculation of “chargeable overseas earnings”
  25. 24 Limit on chargeable overseas earnings where duties of associated employment performed in UK
  26. 24A Restrictions on remittance basis
  27. 24B Definitions of “C” and “I” for the purposes of section 24A(14)
  28. 25 UK-based earnings for year when employee resident, but not ordinarily resident, in UK
  29. 26 Foreign earnings for year when remittance basis applied and employee met section 26A requirement
  30. 26A Section 26: requirement for 3-year period of non-residence
  31. 27 UK-based earnings for year when employee not resident in UK
  32. 28 Meaning of “general earnings from overseas Crown employment subject to UK tax”
  33. 29 Meaning of earnings “for” a tax year
  34. 30 Treatment of earnings for year in which employment not held
  35. 38 Earnings for period of absence from employment
  36. 38A Earnings relating to duties not performed
  37. 39 Duties in UK merely incidental to duties outside UK
  38. 40 Duties on board vessel or aircraft
  39. 41 Employment in UK sector of continental shelf
  40. 41ZA Basis of apportionment
  41. 41A Taxable specific income from employment-related securities: effect of remittance basis
  42. 41B Section 41A: the relevant period
  43. 41C Section 41A: foreign securities income
  44. 41D Limit on foreign securities income where duties of associated employment performed in UK
  45. 41E Foreign securities income: just and reasonable apportionment
  46. 41F Taxable specific income: internationally mobile employees etc
  47. 41G Section 41F: the relevant period
  48. 41H Section 41F: chargeable and unchargeable foreign securities income
  49. 41I Limit on “chargeable foreign securities income” where duties of associated employment performed in UK
  50. 41J Location of employment duties
  51. 41K Securities income from overseas Crown employment
  52. 41L Chargeable and unchargeable foreign securities income: just and reasonable apportionment
  53. 41M Foreign employment election for qualifying new residents
  54. 41N Key definitions
  55. 41P Claim for relief for qualifying new residents
  56. 41Q Amount of relief available
  57. 41R Limit on relief
  58. 41S Effect of claim on relief for contributions to registered pension schemes
  59. 41T Foreign employment relief ignored for purposes of determining adjusted net income
  60. 41U Qualifying foreign general earnings
  61. 41V Qualifying foreign third party income
  62. 41W Qualifying foreign securities income
  63. 41X Meaning of “overseas Crown employment subject to UK tax”
  64. 41Y Location of employment duties
  65. 41Z Artificial arrangements to be disregarded
  66. 41Z1 Limit on qualifying foreign employment income from associated employments
  67. 43 Appeal against Commissioners' decision on domicile or ordinary residence
  68. 44 Treatment of workers supplied by agencies
  69. 45 Arrangements with agencies
  70. 46 Cases involving unincorporated bodies etc.
  71. 46A Anti-avoidance
  72. 47 Interpretation of this Chapter
  73. 48 Scope of this Chapter
  74. 49 Engagements to which this Chapter applies
  75. 50 Worker treated as receiving earnings from employment
  76. 51 Conditions of liability where intermediary is a company
  77. 52 Conditions of liability where intermediary is a partnership
  78. 53 Conditions of liability where intermediary is an individual
  79. 54 Calculation of deemed employment payment
  80. 55 Application of rules relating to earnings from employment
  81. 56 Application of Income Tax Acts in relation to deemed employment
  82. 57 Earlier date of deemed employment payment in certain cases
  83. 58 Relief in case of distributions by intermediary
  84. 59 Provisions applicable to multiple intermediaries
  85. 60 Meaning of “associate”
  86. 60A When a company qualifies as small for a tax year
  87. 60B When a company qualifies as small for a tax year: joint ventures
  88. 60C When a company qualifies as small for a tax year: subsidiaries
  89. 60D When a relevant undertaking qualifies as small for a tax year
  90. 60E When other undertakings qualify as small for a tax year
  91. 60F When other persons qualify as small for a tax year
  92. 60G Sections 60A to 60F: connected persons
  93. 60H Duty on client to state whether it qualifies as small for a tax year
  94. 60I When a person has a UK connection for a tax year
  95. 61 Interpretation
  96. 61A Scope of this Chapter
  97. 61B Meaning of “managed service company”
  98. 61C Section 61B: supplementary
  99. 61D Worker treated as receiving earnings from employment
  100. 61E Calculation of deemed employment payment
  101. 61F Sections 61D and 61E: application of rules relating to earnings from employment
  102. 61G Application of Income Tax Acts in relation to deemed employment
  103. 61H Relief in case of distributions by managed service company
  104. 61I Meaning of “associate”
  105. 61J Interpretation of Chapter
  106. 61K Scope of this Chapter
  107. 61L Meaning of “public authority”
  108. 61M Engagements to which Chapter applies
  109. 61N Worker treated as receiving earnings from employment
  110. 61NA Meaning of status determination statement
  111. 61O Conditions where intermediary is a company
  112. 61P Conditions where intermediary is a partnership
  113. 61Q Calculation of deemed direct payment
  114. 61R Application of Income Tax Acts in relation to deemed employment
  115. 61S Deductions from chain payments
  116. 61T Client-led status disagreement process
  117. 61TA Duty for client to withdraw status determination statement if it ceases to be medium or large
  118. 61U Information to be provided by worker or intermediary and consequences of failure
  119. 61V Consequences of providing fraudulent information
  120. 61W Prevention of double charge to tax and allowance of certain deductions
  121. 61WA Anti-avoidance
  122. 61X Interpretation
  123. 61Y Umbrella companies: joint and several liability
  124. 61Z Relevant parties
  125. 61Z1 Purported umbrella companies
  126. 61Z2 Disclosures to liable persons
  127. 62 Earnings
  128. 63 The benefits code
  129. 64 Relationship between earnings and benefits code
  130. 65 Dispensations relating to benefits within provisions not applicable to lower-paid employment
  131. 66 Meaning of “employment” and related expressions
  132. 67 Meaning of “director” and “full-time working director”
  133. 68 Meaning of “material interest” in a company
  134. 69 Extended meaning of “control”
  135. 69A Optional remuneration arrangements
  136. 69B Optional remuneration arrangements: supplementary
  137. 70 Sums in respect of expenses
  138. 71 Meaning of paid or put at disposal by reason of the employment
  139. 72 Sums in respect of expenses treated as earnings
  140. 73 Cash vouchers to which this Chapter applies
  141. 74 Provision for, or receipt by, member of employee’s family
  142. 75 Meaning of “cash voucher”
  143. 76 Sickness benefits-related voucher
  144. 77 Apportionment of cost of provision of voucher
  145. 78 Voucher made available to public generally
  146. 79 Voucher issued under approved scheme
  147. 80 Vouchers where payment of sums exempt from tax
  148. 81 Benefit of cash voucher treated as earnings
  149. 82 Non-cash vouchers to which this Chapter applies
  150. 83 Provision for, or receipt by, member of employee’s family
  151. 84 Meaning of “non-cash voucher”
  152. 85 Non-cash voucher made available to public generally
  153. 86 Transport vouchers under pre-26th March 1982 arrangements
  154. 87 Benefit of non-cash voucher treated as earnings
  155. 87A Benefit of non-cash voucher treated as earnings: optional remuneration arrangements
  156. 88 Year in which earnings treated as received
  157. 89 Reduction for meal vouchers
  158. 90 Credit-tokens to which this Chapter applies
  159. 91 Provision for, or use by, member of employee’s family
  160. 92 Meaning of “credit-token”
  161. 93 Credit-token made available to public generally
  162. 94 Benefit of credit-token treated as earnings
  163. 94A Benefit of credit-token treated as earnings: optional remuneration arrangements
  164. 95 Disregard for money, goods or services obtained
  165. 96 Dispensations relating to vouchers or credit-tokens
  166. 96A Power to exempt use of non-cash vouchers or credit-tokens to obtain exempt benefits
  167. 97 Living accommodation to which this Chapter applies
  168. 98 Accommodation provided by local authority
  169. 99 Accommodation provided for performance of duties
  170. 100 Accommodation provided as result of security threat
  171. 100A Homes outside UK owned through company etc
  172. 100B Section 100A(1): exceptions
  173. 101 Chevening House
  174. 102 Benefit of living accommodation treated as earnings
  175. 103 Method of calculating cash equivalent
  176. 103A Accommodation provided pursuant to optional remuneration arrangements: relevant amount
  177. 104 General rule for calculating cost of providing accommodation
  178. 105 Cash equivalent: cost of accommodation not over £75,000
  179. 105A Lease premiums
  180. 105B Lease premiums in the case of leases with break clauses
  181. 106 Cash equivalent: cost of accommodation over £75,000
  182. 107 Special rule for calculating cost of providing accommodation
  183. 108 Cash equivalent: accommodation provided for more than one employee
  184. 109 Priority of this Chapter over Chapter 1 of this Part
  185. 110 Meaning of “annual value”
  186. 111 Disputes as to annual value
  187. 112 Meaning of “person involved in providing the accommodation”
  188. 113 Meaning of “the property”
  189. 114 Cars, vans and related benefits
  190. 115 Meaning of “car” and “van”
  191. 116 Meaning of when car or van is available to employee
  192. 117 Meaning of car or van made available by reason of employment
  193. 118 Availability for private use
  194. 119 Where alternative to benefit of low emission car or van offered
  195. 120 Benefit of car treated as earnings
  196. 120A Benefit of car treated as earnings: optional remuneration arrangements
  197. 121 Method of calculating the cash equivalent of the benefit of a car
  198. 121A Optional remuneration arrangements: method of calculating relevant amount
  199. 121B Meaning of “modified cash equivalent”
  200. 122 The price of the car
  201. 123 The list price of a car
  202. 124 The notional price of a car with no list price
  203. 124A Automatic car for a disabled employee
  204. 125 Meaning of “accessory” and related terms
  205. 125A Security features not to be regarded as accessories
  206. 126 Amounts taken into account in respect of accessories
  207. 127 The list price of an accessory
  208. 128 Accessory: published price of the car manufacturer etc.
  209. 129 Accessory: published price of the accessory manufacturer etc.
  210. 130 The notional price of an accessory
  211. 131 Replacement accessories
  212. 132 Capital contributions by employee
  213. 132A Capital contributions by employee: optional remuneration arrangements
  214. 133 How to determine the “appropriate percentage”
  215. 134 Meaning of car with or without a CO2 emissions figure
  216. 135 Car with a CO2 emissions figure: pre-October 1999 registration
  217. 136 Car with a CO2 emissions figure: registration from 1st October 1999 to IP completion day
  218. 136A Car with a CO2 emissions figure: registration on or after IP completion day
  219. 137 Car with a CO2 emissions figure: bi-fuel cars : registration from 1st January 2000 to IP completion day
  220. 137A Car with a CO2 emissions figure: bi-fuel cars registered on or after IP completion day
  221. 138 Car with a CO2 emissions figure: automatic car for a disabled employee
  222. 138A Certain cars with a CO2 emissions figure and an electric range figure
  223. 139 Cars with a CO2 emissions figure: the appropriate percentage
  224. 140 Car without a CO2 emissions figure: the appropriate percentage
  225. 141 Diesel cars: the appropriate percentage
  226. 142 Car first registered before 1st January 1998: the appropriate percentage
  227. 143 Deduction for periods when car unavailable
  228. 144 Deduction for payments for private use
  229. 145 Modification of provisions where car temporarily replaced
  230. 146 Cars that run on road fuel gas
  231. 147 Classic cars: 15 years of age or more
  232. 147A Classic cars: optional remuneration arrangements
  233. 148 Reduction of cash equivalent where car is shared
  234. 149 Benefit of car fuel treated as earnings
  235. 149A Benefit of car fuel treated as earnings: optional remuneration arrangements
  236. 150 Car fuel: calculating the cash equivalent
  237. 151 Car fuel: nil cash equivalent
  238. 152 Car fuel: proportionate reduction of cash equivalent
  239. 153 Car fuel: reduction of cash equivalent
  240. 154 Benefit of van treated as earnings
  241. 154A Benefit of van treated as earnings: optional remuneration arrangements
  242. 155 Cash equivalent of the benefit of a van
  243. 156 Meaning of “shared van”
  244. 157 Reduction of cash equivalent where van is shared
  245. 158 Reduction for payments for private use
  246. 158A Van provided pursuant to optional remuneration arrangements: private use
  247. 159 Modification of provisions where van temporarily replaced
  248. 160 Benefit of van fuel treated as earnings
  249. 160A Benefit of van fuel treated as earnings: optional remuneration arrangements
  250. 161 Van fuel: the cash equivalent
  251. 162 Van fuel: nil cash equivalent
  252. 163 Van fuel: proportionate reduction of cash equivalent
  253. 164 Van fuel: reduction of cash equivalent
  254. 167 Pooled cars
  255. 168 Pooled vans
  256. 169 Car available to more than one member of family or household employed by same employer
  257. 169A Van available to more than one member of family or household employed by same employer
  258. 170 Orders etc. relating to this Chapter
  259. 171 Minor definitions: general
  260. 172 Minor definitions: equipment to enable a disabled person to use a car
  261. 173 Loans to which this Chapter applies
  262. 173A Alternative finance arrangements
  263. 174 Employment-related loans
  264. 175 Benefit of taxable cheap loan treated as earnings
  265. 175A Optional remuneration arrangements: “relevant amount” and “modified cash equivalent”
  266. 176 Exception for loans on ordinary commercial terms
  267. 177 Exceptions for loans at fixed rate of interest
  268. 178 Exception for loans where interest qualifies for tax relief
  269. 179 Exception for certain advances for necessary expenses
  270. 180 Threshold for benefit of loan to be treated as earnings
  271. 181 The official rate of interest
  272. 182 Normal method of calculation: averaging
  273. 183 Alternative method of calculation
  274. 184 Interest treated as paid
  275. 185 Apportionment of cash equivalent in case of joint loan etc.
  276. 186 Replacement loans
  277. 187 Aggregation of loans by close company to director
  278. 188 Loan released or written off: amount treated as earnings
  279. 189 Exception where double charge
  280. 190 Exclusion of charge after death of employee
  281. 191 Claim for relief to take account of event after assessment
  282. 201 Employment-related benefits
  283. 202 Excluded benefits
  284. 203 Cash equivalent of benefit treated as earnings
  285. 203A Employment-related benefit provided under optional remuneration arrangements
  286. 204 Cost of the benefit: basic rule
  287. 205 Cost of the benefit: asset made available without transfer
  288. 205A Deduction for periods when asset unavailable for private use
  289. 205B Reduction of cost of taxable benefit where asset is shared
  290. 206 Cost of the benefit: transfer of used or depreciated asset
  291. 207 Meaning of “annual rental value”
  292. 208 Meaning of “market value”
  293. 209 Meaning of “persons providing benefit”
  294. 210 Power to exempt minor benefits
  295. 211 Special rules for scholarships: introduction
  296. 212 Scholarships provided under arrangements entered into by employer or connected person
  297. 213 Exception for certain scholarships under trusts or schemes
  298. 214 Scholarships: cost of the benefit
  299. 215 Limitation of exemption for scholarship income in section 776(1) of ITTOIA 2005
  300. 221 Payments where employee absent because of sickness or disability
  301. 222 Payments by employer on account of tax where deduction not possible
  302. 223 Payments on account of director’s tax other than by the director
  303. 224 Payments to non-approved personal pension arrangements
  304. 225 Payments for restrictive undertakings
  305. 226 Valuable consideration given for restrictive undertakings
  306. 226A Amount treated as earnings
  307. 226C Only one payment deemed to be made under associated agreements
  308. 226E Sporting testimonial payments
  309. 227 Scope of Part 4
  310. 228 Effect of exemptions on liability under provisions outside Part 2
  311. 228A General exclusion from exemptions: optional remuneration arrangements
  312. 229 Mileage allowance payments
  313. 230 The approved amount for mileage allowance payments
  314. 231 Mileage allowance relief
  315. 232 Giving effect to mileage allowance relief
  316. 233 Passenger payments
  317. 234 The approved amount for passenger payments
  318. 235 Vehicles to which this Chapter applies
  319. 235A Journeys made by members of local authorities etc
  320. 236 Interpretation of this Chapter
  321. 237 Parking provision and expenses
  322. 237A Vehicle-battery charging
  323. 238 Modest private use of heavy goods vehicles
  324. 239 Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles
  325. 240 Incidental overnight expenses and benefits
  326. 241 Incidental overnight expenses and benefits: overall exemption limit
  327. 241A Travel by unpaid directors of not-for-profit companies
  328. 241B Travel where directorship held as part of trade or profession
  329. 242 Works transport services
  330. 243 Support for public bus services
  331. 244 Cycles and cyclist’s safety equipment
  332. 245 Travelling and subsistence during public transport strikes
  333. 246 Transport between work and home for disabled employees: general
  334. 247 Provision of cars for disabled employees
  335. 248 Transport home: late night working and failure of car-sharing arrangements
  336. 248A Emergency vehicles
  337. 249 Interpretation of this Chapter
  338. 250 Exemption of work-related training provision
  339. 251 Meaning of “work-related training”
  340. 252 Exception for non-deductible travel expenses
  341. 253 Exception where provision for excluded purposes
  342. 254 Exception where unrelated assets are provided
  343. 254A Apprenticeship bursaries paid to persons leaving local authority care
  344. 255 Exemption for contributions to individual learning account training
  345. 256 Meaning of “individual learning account training”
  346. 257 Exception for non-deductible travel expenses
  347. 258 Exception where provision for excluded purposes
  348. 259 Exception where unrelated assets are provided
  349. 260 Exception where training not generally available to staff
  350. 261 Exemption of recreational benefits
  351. 262 Benefits not exempted by section 261
  352. 263 Power to alter benefits to which section 261 applies
  353. 264 Annual parties and functions
  354. 265 Third party entertainment
  355. 266 Exemption of non-cash vouchers for exempt benefits
  356. 267 Exemption of credit-tokens used for exempt benefits
  357. 268 Exemption of vouchers and tokens for incidental overnight expenses
  358. 269 Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle
  359. 270 Exemption for small gifts of vouchers and tokens from third parties
  360. 270A Limited exemption for qualifying childcare vouchers
  361. 270AA Meaning of “eligible employee”
  362. 270B Meaning of “relevant earnings amount” and “required time”
  363. 271 Limited exemption of removal benefits and expenses: general
  364. 272 Removal benefits and expenses to which section 271 applies
  365. 273 Conditions applicable to change of residence
  366. 274 Meaning of “the limitation day”
  367. 275 Meaning of “the employment change”
  368. 276 Meaning of “residence”, “former residence” and “new residence” etc.
  369. 277 Acquisition benefits and expenses
  370. 278 Abortive acquisition benefits and expenses
  371. 279 Disposal benefits and expenses
  372. 280 Transporting belongings
  373. 281 Travelling and subsistence
  374. 282 Exclusion from section 281 of benefits and expenses where deduction allowed
  375. 283 Exclusion from section 281 of taxable car and van facilities
  376. 284 Bridging loan expenses
  377. 285 Replacement of domestic goods
  378. 286 Power to amend sections 277 to 285
  379. 287 Limit on exemption
  380. 288 Limited exemption of certain bridging loans connected with employment moves
  381. 289 Relief for certain bridging loans not qualifying for exemption under section 288
  382. 289A Exemption for paid or reimbursed expenses
  383. 289B Approval to pay or reimburse expenses at a flat rate
  384. 289C Revocation of approvals
  385. 289D Exemption for other benefits
  386. 289E Anti-avoidance
  387. 290 Accommodation benefits of ministers of religion
  388. 290A Accommodation outgoings of lower-paid ministers of religion
  389. 290B Allowances paid to lower-paid ministers of religion in respect of accommodation outgoings
  390. 290C Provisions of benefits code not applicable to lower-paid ministers of religion
  391. 290D Meaning of “lower-paid employment as a minister of religion”
  392. 290E Calculation of earnings rate for a tax year
  393. 290F Extra amounts to be added in connection with a car
  394. 290G Related employments
  395. 291 Termination payments to MPs and others ceasing to hold office
  396. 292 Accommodation expenses of MPs
  397. 293 Overnight expenses of other elected representatives
  398. 293A UK travel and subsistence expenses of MPs
  399. 293B UK travel expenses of other elected representatives
  400. 294 European travel expenses of MPs and other representatives
  401. 295 Transport and subsistence for Government ministers etc.
  402. 295A Travel expenses of members of local authorities etc
  403. 296 Armed forces' leave travel facilities
  404. 297 Armed forces' food, drink and mess allowances
  405. 297A Armed forces: the Operational Allowance
  406. 297B Armed forces: the Council Tax Relief
  407. 297C Armed forces: Continuity of Education Allowance
  408. 297D Armed forces: accommodation allowances
  409. 298 Reserve and auxiliary forces' training allowances
  410. 299 Crown employees' foreign service allowances
  411. 299A Voluntary office-holders: compensation for lost employment income
  412. 299B Voluntary office-holders: payments in respect of expenses
  413. 300 Consuls
  414. 301 Official agents
  415. 302 Consular employees
  416. 303 Visiting forces etc
  417. 304 Experts seconded to European Commission
  418. 304A Experts seconded to other European Union bodies
  419. 305 Offshore oil and gas workers: mainland transfers
  420. 306 Miners etc: coal and allowances in lieu of coal
  421. 306A Carers: board and lodging
  422. 306B Limited exemption for sporting testimonial payments
  423. 307 Death or retirement benefit provision
  424. 308 Exemption of contributions to registered pension scheme
  425. 308A Exemption of contributions to overseas pension scheme
  426. 308B Independent advice in respect of conversions and transfers of pension scheme benefits
  427. 308C Provision of pensions advice: limited exemption
  428. 309 Limited exemptions for statutory redundancy payments
  429. 310 Counselling and other outplacement services
  430. 311 Retraining courses
  431. 312 Recovery of tax
  432. 312A Limited exemption for qualifying bonus payments
  433. 312B “Qualifying bonus payments”
  434. 312C Section 312B: the participation and equality requirements
  435. 312D Section 312B: the trading requirement
  436. 312E Section 312B: the indirect employee-ownership requirement
  437. 312F Section 312B: the office-holder requirement
  438. 312G “Service company”
  439. 312H Excluded payments
  440. 312I Interpretation of Chapter 10A
  441. 313 Repairs and alterations to living accommodation
  442. 314 Council tax etc. paid for certain living accommodation
  443. 315 Limited exemption for expenses connected with certain living accommodation
  444. 316 Accommodation, supplies and services used in employment duties
  445. 316ZA Accommodation, supplies and services used in employment duties: payment or reimbursement of expenses
  446. 316A Homeworker’s additional household expenses
  447. 317 Subsidised meals
  448. 318 Childcare: exemption for employer-provided care
  449. 318A Childcare: limited exemption for other care
  450. 318AZA Meaning of “eligible employee”
  451. 318AA Meaning of “relevant earnings amount” and “required time”
  452. 318B Childcare: meaning of “care”, “child” and “parental responsibility”
  453. 318C Childcare: meaning of “qualifying child care”
  454. 318D Childcare: power to vary amounts which are the exempt amount and qualifying conditions
  455. 319 Mobile telephones
  456. 320 Limited exemption for computer equipment
  457. 320A Eye tests and special corrective appliances
  458. 320B Health-screening and medical check-ups
  459. 320C Recommended medical treatment
  460. 320D Flu vaccinations
  461. 321 Suggestion awards
  462. 322 Suggestion awards: “the permitted maximum”
  463. 323 Long service awards
  464. 323A Trivial benefits provided by employers
  465. 323B Section 323A: calculation of available exempt amount
  466. 323C Power to amend sections 323A and 323B
  467. 324 Small gifts from third parties
  468. 325 Overseas medical treatment
  469. 325A Health and employment insurance payments
  470. 326 Expenses incidental to transfer of a kind not normally met by transferor
  471. 326A Fees relating to monitoring schemes relating to vulnerable persons
  472. 326B Advice relating to proposed employee shareholder agreements
  473. 327 Deductions from earnings: general
  474. 328 The income from which deductions may be made
  475. 329 Deductions from earnings not to exceed earnings
  476. 330 Prevention of double deductions
  477. 331 Order for making deductions
  478. 332 Meaning of “the deductibility provisions”
  479. 333 Scope of this Chapter: expenses paid by the employee
  480. 334 Effect of reimbursement etc.
  481. 335 Application of deductions provisions: “earnings charged on receipt” and “earnings charged on remittance”
  482. 336 Deductions for expenses: the general rule
  483. 337 Travel in performance of duties
  484. 338 Travel for necessary attendance
  485. 339 Meaning of “workplace” and “permanent workplace”
  486. 339A Travel for necessary attendance: employment intermediaries
  487. 340 Travel between group employments
  488. 340A Travel between linked employments
  489. 341 Travel at start or finish of overseas employment
  490. 342 Travel between employments where duties performed abroad
  491. 343 Deduction for professional membership fees
  492. 344 Deduction for annual subscriptions
  493. 345 Decisions of an officer of Revenue and Customs under section 344
  494. 346 Deduction for employee liabilities and expenses
  495. 347 Payments made after leaving the employment
  496. 348 Liabilities related to the employment
  497. 349 Meaning of “qualifying insurance contract”
  498. 350 Connected contracts
  499. 351 Expenses of ministers of religion
  500. 352 Limited deduction for agency fees paid by entertainers
  501. 353 Deductions from earnings charged on remittance
  502. 354 Disallowance of expenses relating to earnings taxed on different basis or untaxed
  503. 355 Deductions for corresponding payments by qualifying new resident employees with foreign employers
  504. 356 Disallowance of business entertainment and gifts expenses
  505. 357 Business entertainment and gifts: exception where employer’s expenses disallowed
  506. 358 Business entertainment and gifts: other exceptions
  507. 359 Disallowance of travel expenses: mileage allowances and reliefs
  508. 360 Disallowance of certain accommodation expenses of MPs and other representatives
  509. 360A Social security contributions
  510. 360B Additional household expenses
  511. 361 Scope of this Chapter: cost of benefits deductible as if paid by employee
  512. 362 Deductions where non-cash voucher provided
  513. 363 Deductions where credit-token provided
  514. 364 Deductions where living accommodation provided
  515. 365 Deductions where certain employment-related benefits provided
  516. 366 Scope of this Chapter: amounts fixed by Treasury
  517. 367 Fixed sum deductions for repairing and maintaining work equipment
  518. 368 Fixed sum deductions from earnings payable out of public revenue
  519. 369 Scope of this Chapter: earnings representing benefits or reimbursed expenses
  520. 370 Travel costs and expenses where duties performed abroad: employee’s travel
  521. 371 Travel costs and expenses where duties performed abroad: visiting spouse’s , civil partner's or child’s travel
  522. 372 Where seafarers' duties are performed
  523. 373 Non-resident or qualifying new resident employee’s travel costs and expenses where duties performed in UK
  524. 374 Non-resident or qualifying new resident employee’s spouse’s , civil partner's or child’s travel costs and expenses where duties performed in UK
  525. 375 Meaning of “qualifying arrival date”
  526. 376 Foreign accommodation and subsistence costs and expenses (overseas employments)
  527. 377 Costs and expenses in respect of personal security assets and services
  528. 378 Deduction from seafarers' earnings: eligibility
  529. 379 Calculating the deduction
  530. 380 Limit on deduction where UK duties etc. make amount unreasonable
  531. 381 Taking account of other deductions
  532. 382 Duties on board ship
  533. 383 Place of performance of incidental duties
  534. 384 Meaning of employment “as a seafarer”
  535. 385 Meaning of “ship”
  536. 393 Application of this Chapter
  537. 393A Employer-financed retirement benefits scheme
  538. 393B Relevant benefits
  539. 394 Charge on benefit to which this Chapter applies
  540. 394A Temporary non-residents
  541. 395 Reduction where employee has contributed
  542. 395A Benefits under old section 222 schemes not taxed by virtue of section 394
  543. 395B Exemption or reduction for foreign service
  544. 395C Meaning of “foreign service” in section 395B
  545. 396 Certain lump sums not taxed by virtue of section 394
  546. 397 Certain lump sums: calculation of amount taxed by virtue of section 394
  547. 398 Valuation of benefits
  548. 399 Employment-related loans: interest treated as paid
  549. 399A Responsible person
  550. 400 Interpretation
  551. 401 Application of this Chapter
  552. 402 Meaning of “benefit”
  553. 402A Split of payments and other benefits between sections 402B and 403
  554. 402B Termination awards not benefiting from threshold to be treated as earnings
  555. 402C The termination awards to which section 402B applies
  556. 402D “Post-employment notice pay”
  557. 402E Meaning of “trigger date” and “post-employment notice period” in section 402D
  558. 403 Charge on payment or other benefit where threshold applies
  559. 404 How the £30,000 threshold applies
  560. 404A Amounts charged to be treated as highest part of total income
  561. 404B Power to vary threshold
  562. 405 Exception for certain payments exempted when received as earnings
  563. 406 Exception for death or disability payments and benefits
  564. 407 Exception for payments and benefits under tax-exempt pension schemes
  565. 408 Exception for contributions to registered pension schemes
  566. 409 Exception for payments and benefits in respect of certain legal expenses etc and indemnity insurance
  567. 410 Exception for payments and benefits in respect of certain legal expenses etc and indemnity insurance: individual deceased
  568. 411 Exception for payments and benefits for forces
  569. 412 Exception for payments and benefits provided by foreign governments etc.
  570. 413 Exception in certain cases of foreign service
  571. 413A Exception for payment of certain legal costs
  572. 414 Reduction in other cases of foreign service
  573. 414A Exception for payments and benefits under section 615(3) schemes
  574. 414B Exception in certain cases of foreign service as seafarer
  575. 414C Reduction in other cases of foreign service as seafarer
  576. 415 Valuation of benefits
  577. 416 Notional interest treated as paid if amount charged for beneficial loan
  578. 417 Scope of Part 7
  579. 418 Other related provisions
  580. 419 Negative amounts treated as nil
  581. 420 Meaning of “securities” etc
  582. 421 Meaning of “market value” etc
  583. 421A Meaning of “consideration”
  584. 421B Application of Chapters 2 to 4A
  585. 421C Associated persons
  586. 421D Replacement and additional securities and changes in interests
  587. 421E Exclusions: residence etc
  588. 421F Exclusions: public offers
  589. 421G Exclusions: approved plan or scheme securities
  590. 421H Meaning of “employee-controlled” etc
  591. 421I Consideration for acquisition of employment-related securities
  592. 421J Duty to provide information
  593. 421JA Annual returns
  594. 421JB Returns to be given electronically
  595. 421JC Penalties for late returns
  596. 421JD Penalty if information not given correctly
  597. 421JE Assessment of penalties
  598. 421JF Appeals
  599. 421K Reportable events
  600. 421L Persons to whom section 421J applies
  601. 422 Application of this Chapter
  602. 423 “Restricted securities” and “restricted interest in securities”
  603. 424 Exceptions
  604. 425 No charge in respect of acquisition in certain cases
  605. 426 Charge on occurrence of chargeable event
  606. 427 Chargeable events
  607. 428 Amount of charge
  608. 428A Relief for secondary Class 1 contributions met by employee
  609. 429 Case outside charge under section 426
  610. 430 Election for outstanding restrictions to be ignored
  611. 430A Application of this Chapter where securities exchanged for further securities
  612. 431 Election for full or partial disapplication of this Chapter
  613. 431A Shares under tax advantaged plan or scheme
  614. 431B Securities acquired for purpose of avoidance
  615. 432 Definitions
  616. 435 Application of this Chapter
  617. 436 “Convertible securities”
  618. 437 Adjustment of charge
  619. 438 Charge on occurrence of chargeable event
  620. 439 Chargeable events
  621. 440 Amount of charge
  622. 441 Amount of gain realised on occurrence of chargeable event
  623. 442 Amount of consideration given for entitlement to convert
  624. 442A Relief for secondary Class 1 contributions met by employee
  625. 443 Case outside charge under section 438
  626. 444 Definitions
  627. 446A Application of this Chapter
  628. 446B Charge on acquisition
  629. 446C Amount of charge
  630. 446D Restricted securities and convertible securities
  631. 446E Charge on restricted securities
  632. 446F Adjustment of market value: conditional interests
  633. 446G Adjustment of market value: consideration for entitlement to convert
  634. 446H Adjustment of market value: charge on conversion
  635. 446I Adjustment of consideration or benefit received
  636. 446IA Disapplication of exceptions from charges
  637. 446J Definitions
  638. 446K Application of this Chapter
  639. 446L Charge on non-commercial increases
  640. 446M Securities subject to restriction on valuation date
  641. 446N Securities subject to restriction during relevant period
  642. 446NA Disapplication of exceptions from charges
  643. 446O “Relevant period” and “valuation date”
  644. 446P Definitions
  645. 446Q Application of this Chapter
  646. 446R Case outside this Chapter
  647. 446S Notional loan
  648. 446T Amount of notional loan
  649. 446U Discharge of notional loan
  650. 446UA Pre-acquisition avoidance cases
  651. 446V Chapter to be additional to other income tax charges
  652. 446W Definitions
  653. 446X Application of this Chapter
  654. 446Y Amount treated as income
  655. 446Z Definitions
  656. 447 Charge on other chargeable benefits from securities
  657. 448 Amount of charge
  658. 449 Case outside this Chapter
  659. 450 Definitions
  660. 451 Amount of charge
  661. 452 Cases outside charge under section 449
  662. 453 Charge on increase in value of shares of dependent subsidiary
  663. 454 Chargeable increases
  664. 455 Amount of charge
  665. 456 Cases outside charge under section 453
  666. 457 Charge on other chargeable benefits from shares
  667. 458 Chargeable benefits
  668. 459 Amount of charge
  669. 460 Cases outside charge under section 457
  670. 461 Related acquisitions of additional shares
  671. 462 Company reorganisations etc.
  672. 463 Disposals of shares to connected persons etc. ignored
  673. 464 Application to interests in shares
  674. 465 Duty to notify acquisitions of shares or interests in shares
  675. 466 Duty to notify chargeable events and chargeable benefits
  676. 467 Meaning of “dependent subsidiary”
  677. 468 Meaning of “employee-controlled”
  678. 469 Shares “held by outside shareholders”
  679. 470 Minor definitions
  680. 451 Application of this Chapter
  681. 452 Market value on acquisition
  682. 453 Taxable amount under Chapter 4
  683. 454 Deemed election for disapplication of Chapter 2
  684. 455 Disapplication of Chapter 3B
  685. 456 Meaning of “intellectual property” and “transfer”
  686. 457 Meaning of “research institution”
  687. 458 Meaning of “involved in research”
  688. 459 Transfer of intellectual property by controlled company
  689. 460 Definitions
  690. 471 Options to which this Chapter applies
  691. 472 Associated persons
  692. 473 Introduction to taxation of securities options
  693. 474 Cases where this Chapter does not apply
  694. 475 No charge in respect of acquisition of option
  695. 476 Charge on occurrence of chargeable event
  696. 477 Chargeable events
  697. 478 Amount of charge
  698. 479 Amount of gain realised on occurrence of chargeable event
  699. 480 Deductible amounts
  700. 481 Relief for secondary Class 1 contributions met by employee
  701. 482 Relief for special contribution met by employee
  702. 483 Application of this Chapter where option exchanged for another
  703. 484 Definitions
  704. 485 Application of this Chapter where share option exchanged for another
  705. 486 Duty to notify matters relating to share options
  706. 487 Minor definitions
  707. 488 ... Share incentive plans (SIPs)
  708. 489 Operation of tax advantages in connection with Schedule 2 SIP
  709. 490 No charge on award or acquisition of shares: general
  710. 491 No charge on award of shares as taxable benefit
  711. 492 No charge on partnership share money deducted from salary
  712. 493 No charge on acquisition of dividend shares
  713. 494 No charge on removal of restrictions applying to shares
  714. 495 No charge on increase in value of shares of dependent subsidiary
  715. 496 No charge on cash dividend retained for reinvestment
  716. 497 Limitations on charges on shares ceasing to be subject to plan
  717. 498 No charge on shares ceasing to be subject to plan in certain circumstances
  718. 499 No charge in respect of incidental expenditure
  719. 500 Operation of tax charges in connection with Schedule 2 SIP
  720. 501 Charge on capital receipts in respect of plan shares
  721. 502 Meaning of “capital receipt” in section 501
  722. 503 Charge on partnership share money paid over to employee
  723. 504 Charge on cancellation payments in respect of partnership share agreement
  724. 505 Charge on free or matching shares ceasing to be subject to plan
  725. 506 Charge on partnership shares ceasing to be subject to plan
  726. 507 Charge on disposal of beneficial interest during holding period
  727. 508 Identification of shares ceasing to be subject to plan
  728. 509 Modification of section 696 where charge on shares ceasing to be subject to plan
  729. 510 Payments by trustees to employer company on shares ceasing to be subject to plan
  730. 511 PAYE deductions to be made by trustees on shares ceasing to be subject to plan
  731. 512 Disposal of beneficial interest by participant
  732. 513 Capital receipts: payments by trustees to employer company
  733. 514 Capital receipts: PAYE deductions to be made by trustees
  734. 515 Tax advantages and charges under other Acts
  735. 516 ... SAYE option schemes
  736. 517 Share options to which this Chapter applies
  737. 518 No charge in respect of receipt of option
  738. 519 No charge in respect of exercise of option
  739. 520 No charge in respect of post-acquisition benefits
  740. 521 ... CSOP schemes
  741. 522 Share options to which this Chapter applies
  742. 523 No charge in respect of receipt of option
  743. 524 No charge in respect of receipt of option
  744. 525 No charge in respect of post-acquisition benefits
  745. 526 Charge where option granted at a discount
  746. 527 Enterprise management incentives: qualifying options
  747. 528 No charge on receipt of qualifying option
  748. 529 Scope of tax advantages: option must be exercised by the specified anniversary
  749. 530 No charge on exercise of option to acquire shares at market value
  750. 531 Limitation of charge on exercise of option to acquire shares below market value
  751. 532 Modified tax consequences following disqualifying events
  752. 533 Disqualifying events
  753. 534 Disqualifying events relating to relevant company
  754. 535 Disqualifying events relating to employee
  755. 536 Other disqualifying events
  756. 537 Alterations of share capital for purposes of section 536
  757. 538 Share conversions excluded for purposes of section 536
  758. 539 CSOP and other options relevant for purposes of section 536
  759. 540 No charge on acquisition of shares as taxable benefit
  760. 541 Effects on other income tax charges
  761. 542 Exemption: offer made to public and employees
  762. 543 Discount not covered by exemption in section 542
  763. 544 Exemption: different offers made to public and employees
  764. 545 Discount not covered by exemption in section 544
  765. 546 Meaning of being entitled “on similar terms”
  766. 547 Meaning and amount or value of “registrant discount”
  767. 548 Minor definitions
  768. 549 Application of this Chapter
  769. 550 Meaning of “employee benefit trust”
  770. 551 “Qualifying disposals” for purposes of section 550
  771. 552 Attribution of interest in company to beneficiary or associate
  772. 553 Meaning of “appropriate percentage” for purposes of section 552
  773. 554 Attribution of further interest in company
  774. 554A Application of Chapter 2 : main case
  775. 554AA Application of Chapter 2: close companies
  776. 554AB Meaning of “relevant transaction”
  777. 554AC Meaning of “excluded transaction”
  778. 554AD Section 554AA: meaning of “director”
  779. 554AE Section 554AA: meaning of “material interest”
  780. 554AF Section 554AA: supplementary
  781. 554B Relevant steps: earmarking etc of sum of money or asset
  782. 554C Relevant steps: payment of sum, transfer of asset etc
  783. 554D Relevant steps: making asset available
  784. 554E Exclusions: steps under certain schemes etc
  785. 554F Exclusions: commercial transactions
  786. 554G Exclusions: transactions under employee benefit packages
  787. 554H Exclusions: earmarking of deferred remuneration
  788. 554I Exclusions: introduction to sections 554J to 554M
  789. 554J Exclusions: earmarking for employee share schemes (1)
  790. 554K Exclusions: earmarking for employee share schemes (2)
  791. 554L Exclusions: earmarking for employee share schemes (3)
  792. 554M Exclusions: earmarking for employee share schemes (4)
  793. 554N Exclusions: other cases involving employment-related securities etc
  794. 554O Exclusions: employee car ownership schemes
  795. 554OA Exclusions: transfer of employment-related loans
  796. 554P Exclusions: employment income exemptions under Part 4
  797. 554Q Exclusions: income arising from earmarked sum or asset
  798. 554R Exclusions: acquisitions out of sums or assets
  799. 554RA Exclusions: relevant repayments
  800. 554S Exclusions: pension income chargeable under Part 9 etc
  801. 554T Exclusions: employee pension contributions
  802. 554U Exclusions: pre-6 April 2006 contributions to employer-financed retirement benefit schemes
  803. 554V Exclusions: purchases of annuities out of pension scheme rights
  804. 554W Exclusions: certain retirement benefits etc
  805. 554X Exclusions: transfers between certain foreign pension schemes
  806. 554XA Exclusions: payments in respect of a tax liability
  807. 554Y Power to exclude other relevant steps
  808. 554Z Interpretation: general
  809. 554Z1 Interpretation: persons linked with A
  810. 554Z2 Value of relevant step to count as employment income
  811. 554Z2A Exception to section 554Z2(1): close companies
  812. 554Z3 Value of relevant step
  813. 554Z4 Residence issues
  814. 554Z4A Temporary non-residents
  815. 554Z5 Overlap with money or asset subject to earlier tax liability
  816. 554Z6 Overlap with certain earnings
  817. 554Z7 Exercise price of share options
  818. 554Z8 Cases where consideration given for relevant step
  819. 554Z9 Remittance basis: A did not meet section 26A requirement
  820. 554Z10 Remittance basis: A met section 26A requirement
  821. 554Z11 Remittance basis: supplementary
  822. 554Z11A Temporary non-residents
  823. 554Z11B Earlier income tax liability: application of section 554Z11C
  824. 554Z11C Earlier income tax liability: treatment of payments
  825. 554Z11D Earlier income tax liability: provisional payments of tax
  826. 554Z11E Application for provisional payments to be treated as payment of tax
  827. 554Z11F Provisional payments of tax: further provision
  828. 554Z11G Earlier income tax liability: supplementary provision
  829. 554Z12 Relevant step taken after A's death etc
  830. 554Z13 Subsequent income tax liability
  831. 554Z14 Relief where earmarking not followed by further relevant step
  832. 554Z15 Location of employment duties
  833. 554Z16 Application etc
  834. 554Z17 Employer etc to be treated as relevant third person etc
  835. 554Z18 Earmarking etc
  836. 554Z19 Provision of security
  837. 554Z20 Valuation of step within section 554Z19
  838. 554Z21 Relief for earmarking or security not followed by contribution or relevant benefit
  839. 555 Former employee entitled to deduction in calculating net income
  840. 556 Deductible payments made outside the time limits allowed
  841. 556A Deductible payments made pursuant to tax avoidance arrangements
  842. 557 Deductible payments wholly or partly borne by the former employer etc.
  843. 558 Meaning of “deductible payment”
  844. 559 Liabilities related to the former employment
  845. 560 Meaning of “qualifying insurance contract”
  846. 561 Connected contracts
  847. 562 Meaning of “former employee” and “employment”
  848. 563 Other interpretation
  849. 564 Application of this Part to office-holders
  850. 565 Structure of Part 9
  851. 566 Nature of charge to tax on pension income and relevant definitions
  852. 567 Amount charged to tax
  853. 567A Cases in which Part 7A has applied to source of pension income
  854. 567B Cases where inheritance tax is paid in respect of pension death benefit
  855. 568 Person liable for tax
  856. 569 United Kingdom pensions
  857. 570 “Pension”: interpretation
  858. 571 Taxable pension income
  859. 572 Person liable for tax
  860. 572A Temporary non-residents
  861. 573 Foreign pensions
  862. 574 “Pension”: interpretation
  863. 574A “Pension”: relevant lump sums
  864. 575 Taxable pension income
  865. 576 Person liable for tax
  866. 576A Temporary non-residents
  867. 577 United Kingdom social security pensions
  868. 578 Taxable pension income
  869. 579 Person liable for tax
  870. 579A Pensions
  871. 579B Taxable pension income
  872. 579C Person liable for tax
  873. 579CZA Exemption for beneficiaries' income withdrawal in some cases
  874. 579CA Temporary non-residents
  875. 579CB Refund of overpaid inheritance tax treated as pension
  876. 579D Interpretation
  877. 590 Annuities
  878. 591 Taxable pension income
  879. 592 Person liable for tax
  880. 593 Unauthorised payments: application of section 583
  881. 594 Meaning of “former approved superannuation fund”
  882. 595 Annuities
  883. 596 Taxable pension income
  884. 597 Person liable for tax
  885. 598 Income withdrawals
  886. 599 Taxable pension income
  887. 600 Person liable for tax
  888. 601 Unauthorised personal pension payments
  889. 602 Taxable pension income
  890. 603 Person liable for tax
  891. 604 Meaning of “personal pension scheme” and related expressions
  892. 605 Annuities
  893. 606 Meaning of “retirement annuity contract”
  894. 607 Taxable pension income
  895. 608 Person liable for tax
  896. 609 Annuities for the benefit of dependants
  897. 610 Annuities under non-registered occupational pension schemes
  898. 611 Annuities in recognition of another’s services
  899. 611A Exemptions from sections 609 to 611
  900. 612 Taxable pension income: UK annuities
  901. 613 Taxable pension income: foreign annuities
  902. 614 Person liable for tax
  903. 615 Certain overseas government pensions paid in the United Kingdom
  904. 616 Taxable pension income
  905. 617 Deduction allowed from taxable pension income
  906. 618 Person liable for tax
  907. 619 The House of Commons Members' Fund
  908. 620 Meaning of “House of Commons Members' Fund”
  909. 621 Taxable pension income
  910. 622 Person liable for tax
  911. 623 Return of surplus employee additional voluntary contributions
  912. 624 Taxable pension income
  913. 625 Person liable for tax
  914. 626 Income tax treated as paid
  915. 627 Meaning of “grossing up”
  916. 628 Interpretation
  917. 629 Pre-1973 pensions paid under the Overseas Pensions Act 1973
  918. 630 Interpretation
  919. 631 Taxable pension income
  920. 632 Person liable for tax
  921. 633 Voluntary annual payments
  922. 634 Taxable pension income: UK voluntary annual payments
  923. 635 Taxable pension income: foreign voluntary annual payments
  924. 636 Person liable for tax
  925. 636A Exemptions and liabilities for certain lump sums under registered pension schemes
  926. 636AA Taxable lump sum death benefits
  927. 636B Trivial commutation and winding-up lump sums
  928. 636C Trivial commutation and winding-up lump sum death benefits
  929. 637 Introduction
  930. 637A Pension commencement lump sums
  931. 637B Pension commencement excess lump sums
  932. 637C Serious ill-health lump sums
  933. 637D Uncrystallised funds pension lump sums
  934. 637E Short service refund lump sum
  935. 637F Refund of excess contributions lump sums
  936. 637G Trivial commutation lump sums and winding-up lump sums
  937. 637H Defined benefits lump sum death benefits
  938. 637I Pension protection lump sum death benefits
  939. 637J Uncrystallised funds lump sum death benefits
  940. 637K Annuity protection lump sum death benefits
  941. 637L Drawdown pension fund lump sum death benefits
  942. 637M Flexi-access drawdown lump sum death benefits
  943. 637N Trivial commutation lump sum death benefits
  944. 637P Individual’s lump sum allowance
  945. 637Q Availability of individual’s lump sum allowance
  946. 637R Individual’s lump sum and death benefit allowance
  947. 637S Availability of individual’s lump sum and death benefit allowance
  948. 637T Availability of individual’s lump sum and death benefit allowance where multiple lump sum death benefits paid
  949. 637U Availability of individual’s allowances where lump sums or lump sum death benefits already paid by non-UK schemes
  950. 638 Awards for bravery
  951. 639 Pensions in respect of death due to military or war service
  952. 640 Exemption under section 639 where income withheld
  953. 640A Lump sums provided under armed forces early departure scheme
  954. 641 Wounds and disability pensions
  955. 642 Compensation for National-Socialist persecution
  956. 642A Netherlands Benefit Act for Victims of Persecution 1940-1945
  957. 643 Malawi, Trinidad and Tobago and Zambia government pensions
  958. 644 Pensions payable where employment ceased due to disablement
  959. 644A Health and employment insurance payments
  960. 645 Social security pensions: increases in respect of children
  961. 646 Former miners etc: coal and allowances in lieu of coal
  962. 646A Foreign pensions of consular employees
  963. 646B Registered schemes: beneficiaries' annuities from unused funds
  964. 646C Registered schemes: beneficiaries' annuities from drawdown funds
  965. 646D Non-registered schemes: beneficiaries' annuities from unused funds
  966. 646E Non-registered schemes: beneficiaries' annuities from drawdown funds
  967. 646F Interpretation of sections 646B to 646E
  968. 647 Introduction and meaning of “foreign residence condition” etc.
  969. 648 The Central African Pension Fund
  970. 649 Commonwealth government pensions
  971. 650 Oversea Superannuation Scheme
  972. 651 Overseas Pensions Act 1973
  973. 652 Overseas Service Act 1958
  974. 653 Overseas Service Pensions Fund
  975. 654 The Pensions (India, Pakistan and Burma) Act 1955
  976. 655 Structure of Part 10
  977. 656 Nature of charge to tax on social security income
  978. 657 Meaning of “social security income”, “taxable benefits” etc.
  979. 658 Amount charged to tax
  980. 659 Person liable for tax
  981. 660 Taxable benefits: UK benefits – Table A
  982. 661 Taxable social security income
  983. 662 Person liable for tax
  984. 663 Long-term incapacity benefit: previous entitlement to invalidity benefit
  985. 664 Short-term incapacity benefit not payable at the higher rate
  986. 665 Exempt unless payable to a person involved in a trade dispute
  987. 666 Child maintenance bonus
  988. 667 Amounts in excess of taxable maximum
  989. 668 Taxable maximum
  990. 669 Interpretation
  991. 670 Child maintenance bonus
  992. 671 Amounts in excess of taxable maximum
  993. 672 Taxable maximum: general
  994. 673 Taxable maximum: income-based jobseeker’s allowance
  995. 674 Taxable maximum: contribution-based jobseeker’s allowance
  996. 675 Interpretation
  997. 676 Increases in respect of children
  998. 677 UK social security benefits wholly exempt from tax: Table B
  999. 678 Taxable benefits: foreign benefits
  1000. 679 Taxable social security income
  1001. 680 Person liable for tax
  1002. 681 Taxable and other foreign benefits: exemptions
  1003. 681A Foreign benefits of consular employees
  1004. 681B High income child benefit charge
  1005. 681C The amount of the charge
  1006. 681D Extension of charge in cases where child not living with claimant
  1007. 681E Special cases
  1008. 681F Alteration of income limit etc by Treasury order
  1009. 681G Meaning of “partner”
  1010. 681H Other interpretation provisions
  1011. 681I Winter fuel payment charge
  1012. 681J Alteration of income limit by Treasury order
  1013. 682 Scope of this Part
  1014. 683 PAYE income
  1015. 684 PAYE regulations
  1016. 685 Tax tables
  1017. 686 Meaning of “payment”
  1018. 687 Payments by intermediary
  1019. 687A Payment of employment income under Part 7A
  1020. 688 Agency workers
  1021. 688A Managed service companies: recovery from other persons
  1022. 688AA Workers' services provided through intermediaries: recovery of PAYE
  1023. 688AB Workers’ providing services through intermediaries etc: cases where taxes already paid
  1024. 688B Travel expenses of workers providing services through intermediaries: recovery of unpaid tax
  1025. 689 Employee of non-UK employer
  1026. 689A Oil and gas workers on the continental shelf
  1027. 690 Internationally mobile employees
  1028. 690A Employer notification for internationally mobile employees
  1029. 690B Direction by HMRC in relation to internationally mobile employees
  1030. 690C Employees who were internationally mobile etc. before 2025-26
  1031. 690D Employer notification for qualifying new residents or treaty non-residents
  1032. 690E Direction by HMRC in relation to qualifying new residents or treaty non-residents
  1033. 691 Mobile UK workforce
  1034. 692 Organised arrangements for sharing tips
  1035. 693 Cash vouchers
  1036. 694 Non-cash vouchers
  1037. 695 Credit-tokens
  1038. 695A Employment income under Part 7A
  1039. 696 Readily convertible assets
  1040. 697 Enhancing the value of an asset
  1041. 698 PAYE: special charges on employment-related securities
  1042. 699 PAYE: conversion of shares
  1043. 700 PAYE: gains from securities options
  1044. 700A Employment-related securities etc: internationally mobile employees
  1045. 701 Meaning of “asset”
  1046. 702 Meaning of “readily convertible asset”
  1047. 703 Introduction
  1048. 704 Sums payable by employers under agreements
  1049. 705 Approximations allowed in calculations
  1050. 706 Exclusion of general earnings from income etc.
  1051. 707 Interpretation of this Chapter
  1052. 707A Provision of additional information to His Majesty’s Revenue and Customs
  1053. 708 PAYE repayments
  1054. 709 Additional provision for certain assessments
  1055. 710 Notional payments: accounting for tax
  1056. 711 Right to make a return
  1057. 712 Interpretation of this Part
  1058. 713 Donations to charity: payroll deduction scheme
  1059. 714 Meaning of “donations”
  1060. 715 Approval of schemes: regulation by Treasury
  1061. 716 Alteration of amounts by Treasury order
  1062. 716A Priority rule for dividends etc. of UK resident companies etc.
  1063. 716B Employment intermediaries to keep, preserve and provide information etc
  1064. 717 Orders and regulations made by Treasury or Commissioners
  1065. 718 Connected persons
  1066. 719 Meaning of “control”
  1067. 720 Meaning of “ an officer of Revenue and Customs ” etc.
  1068. 721 Other definitions
  1069. 722 Consequential amendments
  1070. 723 Commencement and transitional provisions and savings
  1071. 724 Repeals and revocations
  1072. 725 Citation
  1073. SCHEDULE 1 Abbreviations and defined expressions
  1074. SCHEDULE 2 ... share incentive plans
  1075. SCHEDULE 3 ... SAYE option schemes
  1076. SCHEDULE 4 ... CSOP schemes
  1077. SCHEDULE 5 Enterprise management incentives
  1078. SCHEDULE 6 Consequential Amendments
  1079. SCHEDULE 7 Transitionals and savings
  1080. SCHEDULE 8 Repeals and revocations

Proposed changes to this act

No one has proposed a change to this act yet.

1,080 provisions

556A Deductible payments made pursuant to tax avoidance arrangements

No deduction may be made under section 555 if the deductible payment is made in pursuance of arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax.

Propose a change

557 Deductible payments wholly or partly borne by the former employer etc.

(1) This section applies if— (a) a deductible payment is made by the former employee (and not by the former employer on behalf of the former employee), but (b) the whole or a part of the cost of making the payment is borne— (i) by the former employer, or (ii) out of the proceeds of a contract of insurance. (2) No deduction of the amount of the cost borne as mentioned in subsection (1)(b) (the “relevant amount”) may be made under section 555. (3) But this is subject to subsection (4) if the whole or a part of the relevant amount is treated— (a) as a relevant retirement benefit of the former employee, or (b) as post-employment earnings of the former employee. (4) In such a case, a deduction of so much of the relevant amount as is treated in that way may be made under section 555.

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558 Meaning of “deductible payment”

(1) For the purposes of this Part each of the following is a deductible payment— A. Payment in or towards the discharge of a liability related to the former employment. B. Payment of any costs or expenses incurred in connection with— (a) a claim that the former employee is subject to a liability related to the former employment, or (b) proceedings relating to or arising out of a claim that the former employee is subject to a liability related to the former employment. BA Payment of any costs or expenses not falling within paragraph B which are incurred in connection with the former employee giving evidence about matters related to the former employment in, or for the purposes of— (a) a proceeding or other process (whether or not involving the former employee), or (b) an investigation (whether or not likely to lead to any proceeding or other process involving the former employee). BB Payment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which— (a) acts of the former employee related to the former employment, or (b) any other matters related to the former employment, are being or are likely to be considered. C. Payment of a premium under a qualifying insurance contract, but only to the extent that the premium relates to— (a) provision in the contract for the former employee to be indemnified against a payment falling within paragraph A, or (b) provision in the contract for the payment of any costs or expenses falling within paragraph B , BA or BB . (2) But a payment which falls within paragraph A B, BA or BB is not a deductible payment if it would have been unlawful for the former employer to enter into a contract of insurance in respect of the liability, or costs or expenses, in question. (3) In this Part— (a) “premium”, in relation to a qualifying insurance contract, means an amount payable to the insurer under the contract, and (b) where a qualifying insurance contract relates to more than one person, employment or risk, the part of the premium to be treated as relating to each of them is to be determined by apportionment on a just and reasonable basis. (4) In this section and section 560— (a) “acts” includes failures to act and acts are “related to the former employment” if the former employee was acting— (i) in the employee's capacity as holder of the former employment, or (ii) in any other capacity in which the former employee was acting in the performance of the duties of that employment, (b) “giving evidence” includes making a formal or informal statement or answering questions, (c) “proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and (d) references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.

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559 Liabilities related to the former employment

For the purposes of this Part each of the following kinds of liability is related to the former employment— A. Liability imposed upon the former employee because he did an act, or failed to do an act— (a) in his capacity as holder of the former employment, or (b) in any other capacity in which he acted in the performance of the duties of the former employment. B. Liability imposed upon the former employee in connection with any proceedings relating to, or arising from, a claim that he is subject to a liability because he did an act, or failed to do an act— (a) in his capacity as holder of the former employment, or (b) in any other capacity in which he acted in the performance of the duties of the former employment.

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560 Meaning of “qualifying insurance contract”

(1) In section 558 “qualifying insurance contract” means a contract of insurance which meets conditions A, B, C and D. (2) Condition A is that, so far as the risks insured against are concerned, the contract only relates to one or more of the following— (a) the indemnification of a former employee against a liability related to the former employment, (b) the indemnification of a person against vicarious liability in respect of a liability related to another person’s employment, (c) the payment of costs or expenses incurred— (i) in connection with a claim that a person is subject to a liability to which the insurance relates, or (ii) in connection with any proceedings relating to or arising out of a claim that a person is subject to a liability to which the insurance relates, (ca) the payment of costs or expenses incurred in connection with a former employee giving evidence about matters related to the former employment in, or for the purposes of— (i) a proceeding or other process (whether or not involving the former employee), or (ii) an investigation (whether or not likely to lead to any proceeding or other process involving the former employee). (cb) the payment of any costs or expenses incurred in connection with a proceeding or other process, or an investigation, in which— (i) acts of a former employee related to the employment, or (ii) any other matters related to the former employment of a former employee, are being or are likely to be considered, (d) the indemnification of an employer against loss from a payment made by the employer to a former employee in respect of— (i) a liability related to the former employment, or (ii) any costs or expenses incurred as mentioned in paragraph (c) , (ca) or (cb) . (3) Condition B is that— (a) the period of insurance under the contract does not exceed 2 years or, if it does, it does so only because of one or more renewals, each for a period of 2 years or less, and (b) the insured is not required to renew the contract for any period. (4) Condition C is— (a) that the insured is not entitled under the contract to receive any payment or other benefit in addition to— (i) cover for the risks insured against, and (ii) any right to renew the contract, or (b) if the insured is so entitled, that the part of the premium reasonably attributable to the entitlement is not a significant part of the whole premium. (5) Condition D is that the contract is not connected with another contract.

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561 Connected contracts

(1) An insurance contract is connected with another contract for the purposes of section 560 if conditions E and F are met— (a) at the time when both contracts are first in force, or (b) at any time after that time. (2) Condition E is that one of the contracts was entered into— (a) by reference to the other, or (b) with a view to enabling or facilitating entry into the other on particular terms. (3) Condition F is that the terms on which one of the contracts was entered into are significantly different from what they would have been if— (a) it had not been entered into in anticipation of the other being entered into, or (b) the other had not also been entered into. (4) If— (a) there is only one such significant difference in terms, and (b) the contracts meet conditions A, B and C specified in section 560, the difference may be disregarded in the following cases. (5) The first case is where the difference is a reduction in premiums under the contract that is reasonably attributable only to the contract— (a) containing a right to renew, or (b) being entered into by way of renewal. (6) The second case is where— (a) two or more contracts have been entered into as part of a single transaction, and (b) the difference is reductions in their premiums that are reasonably attributable only to the premium under each of them having been fixed by reference to the appropriate proportion of the combined premium. (7) In subsection (6) “the combined premium” means the amount that would have been the total premium under a single contract relating to all the risks covered by the contracts.

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562 Meaning of “former employee” and “employment”

(1) In this Part “former employee” means an individual who has ceased to hold an employment. (2) In this Part “employment” includes in particular— (a) any employment under a contract of service, (b) any employment under a contract of apprenticeship, and (c) any employment in the service of the Crown. “Employee” and “employer” have corresponding meanings.

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563 Other interpretation

In this Part each of the following expressions, when used in relation to a former employee, has the meaning given— “former employment” means the employment which the former employee has ceased to hold; “former employer” means— the person under whom the former employee held the former employment, a person for the time being carrying on the whole or any part of the business or other undertaking for the purposes of which the former employee held the former employment, a person who is for the time being subject to any of the liabilities with respect to that business or other undertaking of the person mentioned in paragraph (a), and a person who is connected with a person falling within paragraph (a), (b) or (c); “post-employment earnings” means so much of any amount received after the former employee has ceased to hold the former employment as constitutes general earnings for the purposes of the employment income Parts; “relevant retirement benefit” means a benefit— which is received by the former employee under an employer-financed retirement benefits scheme, and which, under Chapter 2 of Part 6, counts as employment income of the former employee.

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564 Application of this Part to office-holders

(1) The provisions of this Part are expressed to apply to former employees but they apply equally to former office-holders. (2) In those provisions as they apply to a former office-holder— (a) references to holding a former employment are to holding the office; (b) “former employment” means the office held; (c) “former employer” means the person under whom the person held the office. (3) In this Part “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.

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565 Structure of Part 9

The structure of this Part is as follows— Chapter 2— (a) imposes the charge to tax on pension income, and (b) provides for deductions to be made from the amount of income chargeable; Chapters 3 to 15 set out the types of income which are charged to tax under this Part and, for each type of income, identify— (a) the amount of income chargeable to tax for a tax year, and (b) the person liable to pay any tax charged; Chapter 15A— (a) provides for certain amounts paid under registered pension schemes in the form of lump sums to be subject to the charge to tax on pension income, and (b) deals with exemptions from the charge to tax (whether under this Part or any other provision) in relation to certain other amounts paid under registered pension schemes in the form of lump sums.

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566 Nature of charge to tax on pension income and relevant definitions

(1) The charge to tax on pension income under this Part is a charge to tax on that income excluding any exempt income. (2) “Pension income” means the pensions, annuities and income of other types to which the provisions listed in subsection (4) apply. This definition applies for the purposes of the Tax Acts. (3) “Exempt income” means pension income on which no liability to income tax arises as a result of any provision of Chapters 15A to 18 of this Part. This definition applies for the purposes of this Part. (4) These are the provisions referred to in subsection (2)— 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

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567 Amount charged to tax

(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)), and DPI 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 567B (deduction where inheritance tax is paid in respect of pension death benefit); section 617 (10% deduction from an overseas government pension to which section 615 applies); Part 12 (payroll giving).

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567A Cases in which Part 7A has applied to source of pension income

(1) This section applies if— (a) for a tax year there is an amount (“amount TPI”) of taxable pension income for a pension, annuity or other item of pension income, (b) the pension, annuity or other item of pension income accrues or arises out of rights (“the relevant rights”) which represent, or have arisen or derived (directly or indirectly) from, a sum of money or asset which was the subject of a relevant step within the meaning of Part 7A, and (c) Chapter 2 of that Part applied by reason of the relevant step. (2) A deduction is allowed from amount TPI. (3) The amount of the deduction allowed is the amount (“amount EI”) which counted as employment income of A under Chapter 2 of Part 7A in relation to the relevant step (see section 554Z2(1)). (4) If amount EI exceeds amount TPI, the excess is to be carried forward to future tax years to be deducted under this section (when applicable) until all of amount EI has been deducted. (5) Subsection (6) applies if it is determined on a just and reasonable basis that the relevant rights represent, or have arisen or derived from, only part of the sum of money or asset which was the subject of the relevant step. (6) In subsection (3) the reference to the amount which counted as employment income is to be read as a reference to the corresponding proportion of that amount.

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567B Cases where inheritance tax is paid in respect of pension death benefit

(1) This section applies if— (a) there is an amount of taxable pension income (“amount TPI”) for a tax year for a pension, annuity or other item of pension income, (b) amount TPI reflects (to any extent) the payment to a person (“the beneficiary”) of a benefit under a pension scheme on the death of a member of the scheme (“the deceased”), (c) the benefit is not an excluded benefit, and (d) at any time (whether before or after the benefit is paid)— (i) the beneficiary pays an amount of inheritance tax that is attributable to the value of the deceased’s notional pension property, (ii) the deceased’s personal representatives pay an amount of inheritance tax that is so attributable and pass on the burden of that payment to the beneficiary, or (iii) the scheme administrator pays (under section 226B of IHTA 1984) an amount of inheritance tax that is so attributable, and the payment meets the condition in subsection (2). (2) A payment of an amount of inheritance tax meets the condition in this subsection if (and so far as)— (a) in consequence of the payment, the scheme administrator makes an adjustment (under section 226B(5) of IHTA 1984) as a result of which the beneficiary’s entitlement to a benefit other than that mentioned in subsection (1) (“the other benefit”) is reduced, and (b) disregarding that reduction, the other benefit would not give rise to taxable pension income for any tax year. (3) A deduction is allowed from amount TPI equal to the lesser of— (a) the amount of inheritance tax paid as mentioned in subsection (1)(d)(i) or (ii), less so much (if any) of that inheritance tax as has been deducted under this subsection in an earlier tax year, and (b) so much of amount TPI as reflects the payment to the beneficiary of the benefit mentioned in subsection (1). (4) Where the deceased was under 75 on death, and the benefit mentioned in subsection (1) is a relevant lump sum death benefit, a deduction is allowed from amount TPI equal to the lesser of— (a) the amount of inheritance tax paid as mentioned in subsection (1)(d)(iii) so far as it meets the condition in subsection (2), less so much (if any) of that inheritance tax as has been deducted under this subsection in an earlier tax year, and (b) so much of amount TPI as reflects the payment to the beneficiary of the benefit mentioned in subsection (1). (5) Where a deduction is allowed under both of subsections (3) and (4), the deduction under subsection (4) is to be made first. (6) For the purposes of subsection (1)(d) the deceased’s personal representatives “pass on the burden” of a payment of inheritance tax to the beneficiary if— (a) the personal representatives pay a sum to the beneficiary out of the deceased’s estate that has been reduced by the amount of inheritance tax, or (b) the beneficiary reimburses the personal representatives that amount. (7) In this section— “IHTA 1984” means the Inheritance Tax Act 1984; “inheritance tax” includes interest on inheritance tax; “excluded benefit” has the same meaning as in IHTA 1984; “notional pension property” has the same meaning as in IHTA 1984; “relevant lump sum death benefit” has the same meaning as in section 637S.

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568 Person liable for tax

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.

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569 United Kingdom pensions

(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.

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570 “Pension”: interpretation

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

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571 Taxable pension income

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.

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572 Person liable for tax

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

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572A Temporary non-residents

(1) This section applies if an individual is temporarily non-resident. (2) Any pension within subsection (3) is to be treated for the purposes of section 571 as if it accrued in the period of return. (3) A pension is within this subsection if— (a) section 569 applies to it, (b) it is in the form of a lump sum, (c) it accrued in the temporary period of non-residence, and (d) ignoring this section— (i) it is not chargeable to tax under this Chapter, but (ii) it would be so chargeable if the existence of any double taxation relief arrangements were disregarded. (4) Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made. (5) Nothing in any double taxation relief arrangements is to be read as preventing the individual from being chargeable to income tax in respect of any pension treated by virtue of this section as accruing in the period of return (or as preventing a charge to that tax from arising as a result). (6) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains— (a) when an individual is to be regarded as “temporarily non-resident”, and (b) what “the temporary period of non-residence” and “the period of return” mean. (7) In this section— “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010; “DTR claim” means a claim for relief under section 6 of that Act.

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573 Foreign pensions

(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.

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574 “Pension”: interpretation

(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 (c) if conditions A and B are met, a pension which is paid voluntarily or is capable of being discontinued. (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 (c) any child, relative or dependant of a former employee or a former office-holder. (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.

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574A “Pension”: relevant lump sums

(1) A lump sum paid under a pension scheme to a member of the scheme, or to a person in respect of a member of the scheme, is “a relevant lump sum” for the purposes of this Chapter if— (a) the scheme is none of the following— (i) a registered pension scheme, (ii) a relevant non-UK scheme, and (iii) an employer-financed retirement benefits scheme established in the United Kingdom, and (b) the payment of the lump sum is not a relevant step by reason of which Chapter 2 of Part 7A applies. (2) A lump sum paid under a relevant non-UK scheme to a member of the scheme, or to a person in respect of a member of the scheme, is “a relevant lump sum” for the purposes of this Chapter if the effect of paragraphs 1 to 7 of Schedule 34 to FA 2004 is that the member payment provisions (see paragraph 1(4) of that Schedule) do not apply in relation to the payment of the lump sum. (2A) A lump sum is not “a relevant lump sum” by virtue of subsection (2) if it is within paragraph 5ZA(1)(a) or (b) of Schedule 34 to FA 2004 (which specify certain lump sums paid to or in respect of transfer members of relevant non-UK schemes). (3) If section 573 applies to a relevant lump sum then, for the purposes of section 575, the full amount of the pension income arising by reason of the payment of the lump sum is the amount of the lump sum, reduced as follows— Step 1 Deduct so much of the lump sum as is payable by reason of commutation of rights to receive pension income on which no liability to tax arises as a result of any provision of Chapter 17 of this Part. Step 2 Where the lump sum is paid under a pension scheme that was an employer-financed retirement benefits scheme immediately before 6 April 2017, deduct so much of the lump sum left after Step 1 as is deductible in accordance with subsection (6). Where the lump sum is paid otherwise than under such a scheme, deduct so much of the lump sum left after Step 1 as is paid in respect of the value immediately before 6 April 2017 of rights, accrued by then, specifically to receive benefits by way of lump sum payments. Step 3 If the lump sum is paid under an overseas pension scheme, deduct so much of the lump sum left after Step 2 as would, if the scheme were a registered pension scheme, not be liable to income tax under this Part. For the purposes of this Step— treat amounts not included in taxable pension income because of section 637G(2) as being not liable to tax; assume that all of the member’s lump sum allowance is available and all of the member’s lump sum and death benefit allowance is available. (4) The amount given by subsection (3) is treated for the purposes of section 575 as arising when the lump sum is paid. (5) The Commissioners may by regulations make provision (including provision amending this section) as to the assumptions to be made for the purposes of Step 3. (6) These rules apply for the purposes of the first sentence of Step 2— (a) “the post-Step 1 amount” means so much of the lump sum as is left after Step 1; (b) “the relevant amount” means so much of the post-Step 1 amount as is paid in respect of rights specifically to receive benefits by way of lump sum payments; (c) “reckonable service” means service in respect of which the rights to receive the relevant amount accrued (whether or not service in the same employment or with the same employer, and even if the rights originally accrued under a different employer-financed retirement benefits scheme established in or outside the United Kingdom); (d) “pre-6 April 2017 reckonable service” means reckonable service that is service before 6 April 2017; (e) “pre-6 April 2017 reckonable foreign service” means pre-6 April 2017 reckonable service that is foreign service; (f) the deductible amount is the value immediately before 6 April 2017 of the rights then accrued to payment of so much of the relevant amount as is paid in respect of pre-6 April 2017 reckonable service if— (i) at least 75% of pre-6 April 2017 reckonable service is made up of foreign service, or (ii) the period of pre-6 April 2017 reckonable service exceeds 10 years and the whole of the last 10 years of that period is made up of foreign service, or (iii) the period of pre-6 April 2017 reckonable service exceeds 20 years and at least 50% of that period, including any 10 of the last 20 years, is made up of foreign service; (g) otherwise, the deductible amount is the appropriate fraction of the value immediately before 6 April 2017 of the rights then accrued to payment of so much of the relevant amount as is paid in respect of pre-6 April 2017 reckonable service; (h) “the appropriate fraction” is given by— F R where— F is the period of pre-6 April 2017 reckonable foreign service, and R is the period of pre-6 April 2017 reckonable service. (7) In this section— “employer-financed retirement benefits scheme” has the same meaning as in Chapter 2 of Part 6 (see section 393A), “foreign service” has the meaning given by section 395C, “member”, in relation to a pension scheme, has the meaning given by section 151 of FA 2004, “overseas pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(7) of that Act), “payment” includes a transfer of assets and any other transfer of money's worth, “pension scheme” has the meaning given by section 150(1) of FA 2004, and “relevant non-UK scheme” is to be read in accordance with paragraph 1(5) of Schedule 34 to FA 2004.

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575 Taxable pension income

(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).

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576 Person liable for tax

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

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576A Temporary non-residents

(1) This section applies if a person is temporarily non-resident. (2) Any relevant withdrawals within subsection (3) are to be treated for the purposes of section 575 as if they arose in the period of return , but only if the total amount of— (a) the relevant withdrawals within subsection (3), and (b) the relevant withdrawals (as defined by section 579CA(4)) within section 579CA(3) for the same temporary period of non-residence, exceeds £100,000. (3) A relevant withdrawal is within this subsection if— (a) it is paid to the person in the temporary period of non-residence, and (b) ignoring this section, it is not chargeable to tax under this Part (or would not be if a DTR claim were made in respect of it). (4) A “relevant withdrawal” is an amount paid under a relevant non-UK scheme that— (a) is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be income withdrawal (within the meaning of paragraph 7 of Schedule 28 to FA 2004) paid to the person from the person's member's flexi-access drawdown fund in respect of the arrangement, (b) is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be dependants' income withdrawal (within the meaning of paragraph 21 of Schedule 28 to FA 2004) paid to the person from the person's dependant's flexi-access drawdown fund in respect of the arrangement, (c) is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be nominees' income withdrawal (within the meaning of paragraph 27D of Schedule 28 to FA 2004) paid to the person from the person's nominee's flexi-access drawdown fund in respect of the arrangement, (d) is paid to the person in respect of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be successors' income withdrawal (within the meaning of paragraph 27J of Schedule 28 to FA 2004) paid to the person from the person's successor's flexi-access drawdown fund in respect of the arrangement, (e) is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a short-term annuity (within the meaning of paragraph 6 of Schedule 28 to FA 2004) purchased using sums or assets out of the person's member's flexi-access drawdown fund in respect of the arrangement, (f) is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a dependants' short-term annuity (within the meaning of paragraph 20 of Schedule 28 to FA 2004) purchased using sums or assets out of the person's dependant's flexi-access drawdown fund in respect of the arrangement, (g) is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a nominees' short-term annuity (within the meaning of paragraph 27C of Schedule 28 to FA 2004) purchased using sums or assets out of the person's nominee's flexi-access drawdown fund in respect of the arrangement, (h) is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme and would, if the scheme were a registered pension scheme, be a payment of a successors' short-term annuity (within the meaning of paragraph 27H of Schedule 28 to FA 2004) purchased using sums or assets out of the person's successor's flexi-access drawdown fund in respect of the arrangement, (i) is paid before 6 April 2015 to the person in respect of an arrangement relating to the person under the scheme which at the time of the payment was an arrangement to which section 165(3A) or 167(2A) of FA 2004 (flexible drawdown arrangements) applied and would, if the scheme had been a registered pension scheme, have been income withdrawal or dependants' income withdrawal (within the meaning of paragraphs 7 and 21 of Schedule 28 to FA 2004), (j) is a payment to the person of an annuity purchased using sums or assets held for the purposes of an arrangement relating to the person under the scheme where— (i) the payment would, if the scheme were a registered pension scheme, be of a lifetime annuity or dependants' annuity within paragraph 3(1A) or 17(1ZA), as the case may be, of Schedule 28 to FA 2004, and (ii) the terms of the contract under which it is paid are such that there will or could be decreases in the amount of the annuity other than decreases which, if the scheme were a registered pension scheme, would be decreases from time to time allowed by regulations under paragraph 3(1)(d) or 17(1)(c), as the case may be, of Schedule 28 to FA 2004 (and any such regulations are to be treated as having effect for this purpose), or (k) is a payment to the person under a money purchase arrangement relating to the person under the scheme that, if the scheme were a registered pension scheme, would be a payment to the person of a scheme pension that the person would for the purposes of Part 4 of FA 2004 be treated as having become entitled to at a time on or after 6 April 2015 when fewer than 11 other individuals were entitled to present payment of a scheme pension under the scheme. (4A) For the purpose of determining whether the figure specified in subsection (2) is exceeded, any relevant withdrawal paid in a currency other than sterling is to be translated into sterling using the average exchange rate for the year ending with 31 March in the tax year in which the relevant withdrawal is paid. (5) If section 809B, 809D or 809E of ITA 2007 (remittance basis) applied to the person for the year of return, any relevant withdrawal within subsection (3) that was remitted to the United Kingdom in the temporary period of non-residence is to be treated as remitted to the United Kingdom in the period of return. (6) This section does not apply to a relevant withdrawal if— (a) it is paid to or in respect of a relieved member of the scheme and is not referable to the member's UK tax-relieved fund under the scheme, or (b) it is paid to or in respect of a transfer member of the scheme and is not referable to the member's relevant transfer fund under the scheme. (7) Nothing in any double taxation relief arrangements is to be read as preventing the person from being chargeable to income tax in respect of any relevant withdrawal treated by virtue of this section as arising in the period of return (or as preventing a charge to that tax from arising as a result). (8) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains— (a) when a person is to be regarded as “temporarily non-resident”, and (b) what “the temporary period of non-residence” and “the period of return” mean. (9) In this section— “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010; “DTR claim” means a claim for relief under section 6 of that Act; “member's flexi-access drawdown fund” and “dependant's flexi-access drawdown fund” have the same meaning as in Part 4 of FA 2004 (see paragraphs 8A and 22A of Schedule 28 to FA 2004); “remitted to the United Kingdom” has the same meaning as in Chapter A1 of Part 14 of ITA 2007; “scheme pension” means a scheme pension within the meaning of paragraph 2 of Schedule 28 to FA 2004 or a dependants' scheme pension within the meaning of paragraphs 16 to 16C of that Schedule; “the year of return” means the tax year that consists of or includes the period of return. (10) The following expressions have the meaning given in Schedule 34 to FA 2004— “relevant non-UK scheme” (see paragraph 1(5)); “relieved member” (see paragraph 1(7)); “transfer member” (see paragraph 1(8)); “member's UK tax-relieved fund” (see paragraph 3(2)); “member's relevant transfer fund” (see paragraph 4(2)).

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577 United Kingdom social security pensions

(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, or section 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), or section 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, or section 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, or section 37 of SSCB(NI)A 1992; “widowed parent’s allowance” means any allowance payable under— section 39A of SSCBA 1992, or section 39A of SSCB(NI)A 1992; “widow’s pension” means any pension payable under— section 38 of SSCBA 1992, or section 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).

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578 Taxable pension income

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.

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579 Person liable for tax

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.

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579A Pensions

(1) This section applies to any pension under a registered pension scheme (but subject to subsection (2) and section 579CZA). (2) This section does not apply to a pension under a registered pension scheme if and to the extent that, when it is paid, a liability to the unauthorised payments charge arises in respect of the amount of the payment (see section 208 of FA 2004). (3) Chapter 17 of this Part provides exemptions for certain annuities (see sections 646B and 646C: certain beneficiaries' annuities purchased out of unused or drawdown funds).

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579B Taxable pension income

If section 579A applies, the taxable pension income for a tax year is the full amount of the pension under the registered pension scheme that accrues in that year irrespective of when any amount is actually paid This is subject to section 579CA.

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579C Person liable for tax

If section 579A applies, the person liable for any tax charged under this Part is the person receiving or entitled to the pension under the registered pension scheme.

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579CZA Exemption for beneficiaries' income withdrawal in some cases

(1) Section 579A does not apply to dependants' income withdrawal or nominees' income withdrawal if it is paid— (a) in respect of a deceased member of a registered pension scheme who had not reached the age of 75 at the date of the member's death, and (b) to a person from the person's— (i) dependant's drawdown pension fund, (ii) dependant's flexi-access drawdown fund, or (iii) nominee's flexi-access drawdown fund, in respect of a money purchase arrangement under a registered pension scheme. (2) Section 579A does not apply to successors' income withdrawal if it is paid— (a) in respect of a deceased beneficiary of a deceased member of a registered pension scheme where the beneficiary had not reached the age of 75 at the date of the beneficiary's death, and (b) to a person from the person's successor's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme, and here “beneficiary” means dependant, nominee or successor. (3) Subsection (1) is subject to the following provisions of this section. (4) Section 579A does apply to dependants' income withdrawal paid on or after 6 April 2015 to a person from the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme (“the drawdown fund”) if before 6 April 2015— (a) any payment of dependants' income withdrawal was made from— (i) the drawdown fund, or (ii) any fund represented (to any extent) by the drawdown fund, or (b) any payment was made of a dependants' short-term annuity purchased using sums or assets out of— (i) the drawdown fund, or (ii) any fund represented (to any extent) by the drawdown fund. (5) Section 579A does apply to dependants' income withdrawal paid in respect of a deceased member of a registered pension scheme to a person from the person's dependant's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme (“the new fund”) if— (a) any of the sums or assets that make up the new fund— (i) became newly-designated dependant funds under paragraph 22A(2)(b) of Schedule 28 to FA 2004 or as a result of the operation of any of paragraphs 22B to 22D of that Schedule, or (ii) arise, or (directly or indirectly) derive, from any such newly-designated dependant funds or from sums or assets which so arise or derive, (b) before 6 April 2015— (i) any payment of dependants' income withdrawal in respect of the deceased member was made to the person from, or (ii) any payment in respect of the deceased member was made to the person of a dependants' short-term annuity purchased using sums or assets out of, the person's dependant's drawdown pension fund in respect of a money purchase arrangement under a registered pension scheme, and (c) any of the sums or assets that made up that fund at the time of that payment to any extent make up, or are represented by sums or assets that to any extent make up, the new fund. (6) Where relevant unused uncrystallised funds— (a) are designated on or after 6 April 2015 as available for the payment of dependants' drawdown pension or nominees' drawdown pension, and (b) as a result of the designation make up (to any extent) a person's dependant's flexi-access drawdown fund or nominee's flexi-access drawdown fund in respect of a money purchase arrangement under a registered pension scheme, but (c) are not so designated before the end of the relevant two-year period, section 579A does apply to dependants' income withdrawal or nominees' income withdrawal paid to the person from the fund so far as it is paid in respect of sums or assets for the time being representing the whole or any part of those relevant unused uncrystallised funds. (7) In this section— “dependant”, “nominee” and “successor” have the meaning given (respectively) by paragraphs 15, 27A and 27F of Schedule 28 to FA 2004, “dependant's drawdown pension fund”, “dependant's flexi-access drawdown fund”, “nominee's flexi-access drawdown fund” and “successor's flexi-access drawdown fund” have the meaning given (respectively) by paragraphs 22, 22A, 27E and 27K of Schedule 28 to FA 2004, “money purchase arrangement” has the meaning given by section 152 of FA 2004, and “the relevant two-year period”, in relation to relevant unused uncrystallised funds held for the purposes of a money purchase arrangement relating to a deceased individual under a registered pension scheme, means the period of two years beginning with the earlier of the day on which the scheme administrator of the scheme first knew of the individual's death and the day on which the scheme administrator could first reasonably have been expected to have known of it. (8) For the purposes of this section, sums or assets held after the death of a member of a registered pension scheme for the purposes of a money purchase arrangement relating to the member under the scheme are “relevant unused uncrystallised funds” if— (a) they are unused uncrystallised funds, and (b) the member had not reached the age of 75 at the date of the member's death. (9) Paragraph 27E(4) and (5) of Schedule 28 to FA 2004 (meaning of “unused uncrystallised funds”) apply for the purposes of subsection (8)(a).

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579CA Temporary non-residents

(1) This section applies if a person is temporarily non-resident. (2) Any relevant withdrawals within subsection (3) are to be treated for the purposes of section 579B as if they accrued in the period of return , but only if the total amount of— (a) the relevant withdrawals within subsection (3), and (b) the relevant withdrawals (as defined by section 576A(4)) within section 576A(3) for the same temporary period of non-residence, exceeds £100,000 (3) A relevant withdrawal is within this subsection if— (a) it is paid to the person in the temporary period of non-residence, and (b) ignoring this section, it is not chargeable to tax under this Part (or would not be if a DTR claim were made in respect of it). (4) A “relevant withdrawal” is— (a) any income withdrawal paid to the person from a member's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (b) any dependants' income withdrawal paid to the person from a dependant's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (c) any nominees' income withdrawal paid to the person from a nominee's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (d) any successors' income withdrawal paid to the person from a successor's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (e) any payment to the person of a short-term annuity purchased using sums or assets out of a member's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (f) any payment to the person of a dependants' short-term annuity purchased using sums or assets out of a dependant's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (g) any payment to the person of a nominees' short-term annuity purchased using sums or assets out of a nominee's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (h) any payment to the person of a successors' short-term annuity purchased using sums or assets out of a successor's flexi-access drawdown fund in respect of an arrangement relating to the person under a registered pension scheme, (i) any uncrystallised funds pension lump sum paid to the person in respect of an arrangement relating to the person under a registered pension scheme, but only so far as section 579A applies in relation to the sum (see section 636A), (j) any income withdrawal, or dependants' income withdrawal, paid before 6 April 2015 to the person under a registered pension scheme in respect of an arrangement relating to the person under the scheme which at the time of the payment was an arrangement to which section 165(3A) or 167(2A) of FA 2004 applied (flexible drawdown arrangements), (k) any payment to the person of a lifetime annuity or dependants' annuity where— (i) the annuity is within paragraph 3(1A) or 17(1ZA), as the case may be, of Schedule 28 to FA 2004, (ii) the terms of the contract under which the annuity is paid are such that there will or could be decreases in the amount of the annuity other than decreases from time to time allowed by regulations under paragraph 3(1)(d) or 17(1)(c), as the case may be, of Schedule 28 to FA 2004 (and any such regulations are to be treated as having effect for this purpose), and (iii) the annuity is purchased using sums or assets held for the purposes of a registered pension scheme, ... (l) any payment to the person of a scheme pension, or dependants' scheme pension, under a money purchase arrangement under a registered pension scheme where— (i) the person first acquired an actual (rather than a prospective) right to receive the scheme pension on or after 6 April 2015, (ii) when the person first acquired that actual right, fewer than 11 other individuals were entitled to the present payment of a scheme pension, or dependants' scheme pension, under the registered pension scheme, and (iii) the scheme pension is not payable under an annuity contract treated under section 153(8) or (8A) of FA 2004 as having become a registered pension scheme, or (m) any payment to the person of a lump sum to which section 579A applies by virtue of section 636A(4ZA). (4A) For the purpose of determining whether the figure specified in subsection (2) is exceeded, any relevant withdrawal paid in a currency other than sterling is to be translated into sterling using the average exchange rate for the year ending with 31 March in the tax year in which the relevant withdrawal is paid. (5) Nothing in any double taxation relief arrangements is to be read as preventing the person from being chargeable to income tax in respect of any relevant withdrawal treated by virtue of this section as accruing in the period of return (or as preventing a charge to that tax from arising as a result). (6) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains— (a) when a person is to be regarded as “temporarily non-resident”, and (b) what “the temporary period of non-residence” and “the period of return” mean. (7) In this section— “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010; “DTR claim” means a claim for relief under section 6 of that Act; “dependants' annuity”, “dependant's flexi-access drawdown fund”, “dependants' scheme pension”, “dependants' short-term annuity”, “lifetime annuity”, “member's flexi-access drawdown fund”, “money purchase arrangement”, “nominee's flexi-access drawdown fund”, “scheme pension”, “short-term annuity”, “successor's flexi-access drawdown fund” and “uncrystallised funds pension lump sum” have the same meaning as in Part 4 of FA 2004 (see section 152 of FA 2004 and paragraphs 2, 3, 6, 8A, 16 to 16C, 17, 20, 22A, 27E and 27K of Schedule 28, and paragraph 4A of Schedule 29, to FA 2004).

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579CB Refund of overpaid inheritance tax treated as pension

(1) This section applies if— (a) an amount of inheritance tax that is attributable to the value of notional pension property of a deceased member of a registered pension scheme is paid, (b) some or all of the inheritance tax paid— (i) is repaid under section 241(1) of that Act to a person, other than a non-qualifying person, who is entitled to receive benefits under the scheme on the deceased’s death (a “beneficiary”), or (ii) is repaid under that section to the deceased’s personal representatives and passed on by the personal representatives to a beneficiary, (c) in a case in which the payment of inheritance tax mentioned in paragraph (a) was made by the beneficiary or by the deceased’s personal representatives, a deduction is allowed under section 567B in respect of the payment, and (d) the deceased was aged 75 or over at the date of their death. (2) The relevant amount is treated for the purposes of this Part as though it were a pension paid under the registered pension scheme (and is treated as accruing in the tax year in which it is paid). (3) In subsection (2) “the relevant amount” means— (a) in a case in which the payment of inheritance tax mentioned in subsection (1)(a) is made by the scheme administrator, the amount of the payment made to the beneficiary mentioned in subsection (1)(b)(i) or (ii); (b) in a case in which the payment of inheritance tax mentioned in subsection (1)(a) is made by a beneficiary or by the deceased’s personal representatives, the lesser of— (i) the amount of the payment made to the beneficiary mentioned in subsection (1)(b)(i) or (ii), and (ii) the deduction allowed under section 567B in respect of the payment of inheritance tax mentioned in subsection (1)(a). (4) In this section— “inheritance tax” includes interest on inheritance tax; “non-qualifying person” has the same meaning as in section 206 of FA 2004 (special lump sum death benefit charge).

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579D Interpretation

In this Chapter— “income withdrawal” has the meaning given by paragraph 7 of that Schedule; “nominees' income withdrawal" has the meaning given by paragraph 27D of that Schedule; “successors' income withdrawal" has the meaning given by paragraph 27J of Schedule 28 to FA 2004. “pension under a registered pension scheme” includes— an annuity under, or purchased with sums or assets held for the purposes of, or representing acquired rights under, a registered pension scheme, and income withdrawal or dependants' income withdrawal , or nominees' income withdrawal or successors' income withdrawal, under a registered pension scheme.

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590 Annuities

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591 Taxable pension income

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592 Person liable for tax

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593 Unauthorised payments: application of section 583

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