Income Tax (Trading and Other Income) Act 2005 section 717

Exemption for part of purchased life annuity payments

Section 717 provides that part of each payment received under a purchased life annuity is exempt from income tax, representing a return of the original capital used to buy the annuity.

• A portion of each purchased life annuity payment is exempt from income tax, with the exempt amount determined under section 719
• Certain annuities are excluded from this exemption, as specified in section 718
• Only the capital element of each annuity payment is exempt; the income element remains taxable
• The term "purchased life annuity" has the same meaning as defined in section 423