Income Tax (Earnings and Pensions) Act 2003 section 596

Taxable pension income

Section 596 establishes how to determine the amount of taxable pension income from annuities, which is then used in the calculation of net taxable pension income under section 567.

• Tax is charged on annuity income received during the tax year
• The taxable amount is the total annuity payments actually received in the relevant tax year
• This figure feeds into the broader computation of net taxable pension income under section 567
• The basis of assessment is a receipts basis — only amounts received in the year are taxable