Income Tax (Earnings and Pensions) Act 2003 section 595

Annuities

Section 595 identifies annuities paid from approved personal pension schemes as pension income for income tax purposes.

• Annuities from approved personal pension schemes are classified as pension income
• These annuities are taxed under the pension income rules, not under the general trading or investment income rules
• This prevents the same annuity from being taxed twice under different parts of the tax code
• Earlier transitional provisions allowing payers to delay setting up PAYE for these annuities are no longer in force