Income Tax (Earnings and Pensions) Act 2003 section 634

Taxable pension income: UK voluntary annual payments

Section 634 sets out how to calculate the taxable pension income from voluntary annual payments when the payer is based in the United Kingdom.

• This section applies only to voluntary annual payments that fall within section 633 and are made by or on behalf of a person in the UK.
• The taxable amount for any tax year is the full amount of payments that accrue during that year, calculated on a day-to-day basis.
• The timing of actual payment is irrelevant — what matters is when the income accrues, not when it is received.
• The resulting taxable pension income figure feeds into the broader computation of net taxable pension income under section 567.