Income Tax (Earnings and Pensions) Act 2003 section 656

Nature of charge to tax on social security income

Section 656 establishes how the income tax charge applies to social security income, clarifying that exempt income is excluded from the charge.

• Social security income is subject to income tax, but only to the extent it is not exempt
• Exempt income is social security income on which no tax liability arises under specific legislative chapters
• The exemptions are found in Chapters 4, 5, and 7 of the social security income provisions
• The definition of exempt income applies throughout the social security income part of the legislation