Income Tax (Earnings and Pensions) Act 2003 section 642

Compensation for National-Socialist persecution

Section 642 provides a full income tax exemption for pensions and annuities paid to victims of National-Socialist persecution under the laws of Germany or Austria.

• Pensions and annuities paid to victims of National-Socialist persecution are completely exempt from UK income tax
• The exemption applies where payments are made under special legal provisions enacted by the Federal Republic of Germany (or any part of it) or Austria
• The payments must be made under laws specifically designed to compensate victims of National-Socialist persecution
• No income tax liability arises on these payments, so they do not need to be included in taxable income calculations