Income Tax Act 2007 section 572A

Meaning of "avoidance arrangements"

Section 572A deals with the tax treatment of pension lump sums received by individuals who are temporarily non-resident in the UK, ensuring such payments cannot escape UK tax through double taxation agreements.

• The section applies to individuals who are temporarily non-resident and receive a pension paid as a lump sum during that period of temporary non-residence.
• Where a pension lump sum would normally be taxable as a UK pension under ITEPA but is exempt only because of a double taxation agreement, the lump sum is treated as if it accrued in the individual's period of return to the UK.
• Even where a person has not yet made a claim under a double taxation agreement, if they could make such a claim, the lump sum is still treated as not being subject to a UK tax charge for the purposes of this section.
• No double taxation relief arrangement can prevent the pension lump sum caught by this section from giving rise to a UK tax liability in the period of return.