Income Tax (Earnings and Pensions) Act 2003 section 579B

Taxable pension income

Section 579B establishes how taxable pension income from a registered pension scheme is calculated for a given tax year, based on accrual rather than actual payment.

• Pension income from a registered pension scheme is taxed on an accruals basis, not on the basis of when it is actually paid
• The taxable amount is the full pension that accrues in the tax year in question
• The timing of actual payment is irrelevant to determining the taxable amount for a given year
• Special rules for temporary non-residents may modify the standard treatment