Income Tax (Earnings and Pensions) Act 2003 section 624

Taxable pension income

Section 624 sets out how to determine the amount of taxable pension income from certain pension schemes, which then feeds into the calculation of net taxable pension income.

• This section establishes the basis of assessment for taxable pension income from non-approved pension schemes or arrangements.
• The tax charge applies to the grossed-up amount of payments made during the tax year in question.
• The taxable pension income figure calculated under this section is used in the wider computation of net taxable pension income under section 567 of the same Act.
• The grossing-up process ensures that the full pre-tax value of payments is brought into the tax charge, regardless of whether any tax has already been deducted at source.