Income Tax (Earnings and Pensions) Act 2003 section 571

Taxable pension income

Section 571 sets out how to determine the amount of taxable pension income from a United Kingdom pension for a given tax year.

• Taxable pension income is based on the full amount of pension that accrues during the tax year
• The accruals basis means pension income is treated as building up from day to day over the year
• The timing of actual payment is irrelevant — what matters is the period in which the pension accrues
• The resulting figure feeds into the calculation of net taxable pension income under section 567