Income Tax (Earnings and Pensions) Act 2003 section 643

Malawi, Trinidad and Tobago and Zambia government pensions

Section 643 provides an income tax exemption for certain government service pensions from Malawi, Trinidad and Tobago and Zambia that are now paid by the UK government, provided specific conditions are met.

• Government service pensions originally payable by Malawi, Trinidad and Tobago or Zambia are exempt from UK income tax where three conditions are satisfied: the pension is paid to the original pensioner (who retired before 6 April 1973) or their surviving spouse or civil partner; the pension is now paid under the Overseas Pensions Act 1973; and a relevant double taxation agreement would have exempted the pension had it still been paid by the original government
• The exemption covers pensions for government service rendered to the governments of Malawi, Trinidad and Tobago, Zambia, and their predecessor states including Northern Rhodesia and the Federation of Rhodesia and Nyasaland
• The exemption does not apply to any element of the pension that represents an increase paid under the Pensions (Increase) Act 1971, as such increases have always been paid and taxed as UK government pensions
• The exemption remains effective only for as long as the relevant provisions of the applicable double taxation agreement with the country in question remain in force and unchanged

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