Income Tax (Earnings and Pensions) Act 2003 section 644

Pensions payable where employment ceased due to disablement

Section 644 provides an income tax exemption for all or part of a pension paid to a person who had to leave their job because of a disablement caused by their work duties or war injuries.

• A disablement pension is one paid because a person left their employment or office due to a disablement attributable to performing their job duties or to war injuries, but does not include pensions paid under registered pension schemes
• The exempt amount is calculated by comparing the actual disablement pension with whatever pension would have been payable if the disablement had not been work-related or caused by war injuries
• If no pension would otherwise have been payable, the entire disablement pension is exempt; if a smaller pension would have been payable, only the excess is exempt; in any other case, there is no exemption
• An "office" for these purposes means any position that exists independently of the person who holds it and may be filled by successive holders