Income and Corporation Taxes Act 1988

615 Exemption from tax in respect of certain pensions. U.K.

(1) M1 A pension to which this subsection applies shall not be liable to charge to income tax if it is the income of a person who satisfies the Board that he is not resident in the United Kingdom.

A claim under this subsection shall be made to the Board.

(2) Subsection (1) above applies to any of the following pensions—

(a) M2 a pension paid under the authority of the M3 Pensions (India, Pakistan and Burma) Act 1955 (which has effect, by virtue of subsection (3) of section 2 of the Overseas Pensions Act 1973, as a scheme made under that section);

(b) M4 a pension paid out of any fund established in the United Kingdom by the government of any country which is, or forms part of, a country to which this paragraph applies, an associated state, a colony, a protectorate, a protected state or a United Kingdom trust territory, or by a government constituted for two or more such countries, if the fund was established for the sole purpose of providing pensions, whether contributory or not, payable in respect of service under that government;

(c) M5 a pension paid out of the fund formed under the Overseas Superannuation Scheme (formerly known as the Colonial Superannuation Scheme); [F1 or which would have been so paid had section 2(2)(e) and (4A) of the Overseas Pensions Act 1973 not been enacted;]

(d) a pension paid under section 1 of the M6 Overseas Pensions Act 1973, whether or not paid out of a fund established under a scheme made under that section;

(e) M7 so much of any pension paid to or in respect of any person—

(i) under an order made under section 2 of the M8 Overseas Service Act 1958 and having effect as if it were a scheme under section 2 of the Overseas Pensions Act 1973 or under a pension scheme originally provided and maintained under such an order and having such effect, or

(ii) under section 4(2) of the Overseas Service Act 1958, which has effect as if it were a scheme under section 2 of the Overseas Pensions Act 1973,

as may be certified by the Secretary of State to be attributable to the employment of that person in the public services of an overseas territory;

(f) M9 a pension paid out of the fund established under the name “the Central African Pension Fund” by section 24 of the M10 Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963;

(g) M11 a pension paid out of the Overseas Service Pensions Fund established under section 7(1) of the M12 Overseas Aid Act 1966.

(3) M13 Where an annuity is paid from a superannuation fund to which this subsection applies to a person who is not resident in the United Kingdom, income tax shall not be deducted from any payment of the annuity or accounted for under section 349(1) by the trustees or other persons having the control of the fund.

(4) M14 Subsection (1) above shall not apply to so much of any pension falling within paragraph (a) or (d) of subsection (2) above as is paid by virtue of the application to the pension of the Pensions (Increase) Acts.

(5) M15 Paragraph (b) of subsection (2) above applies to any country mentioned in Schedule 3 to the M16 British Nationality Act 1981 except Australia, Canada, New Zealand, India, Sri Lanka and Cyprus.

(6) M17 Subsection (3) above applies to any superannuation fund which—

(a) is bona fide established under irrevocable trusts in connection with some trade or undertaking carried on wholly or partly outside the United Kingdom;

(b) has for its sole purpose [F2 (subject to any enactment or Northern Ireland legislation requiring or allowing provision for the value of any rights to be transferred between schemes or between members of the same scheme)] the provision of superannuation benefits in respect of persons’ employment in the trade or undertaking wholly outside the United Kingdom; and

(c) is recognised by the employer and employed persons in the trade or undertaking;

and for the purposes of this subsection duties performed in the United Kingdom the performance of which is merely incidental to the performance of other duties outside the United Kingdom shall be treated as performed outside the United Kingdom.

(7) M18 In this section—

• “pension” includes a gratuity or any sum payable on or in respect of death or, in the case of a pension falling within subsection (2)(g) above, ill-health, and a return of contributions with or without interest thereon or any other addition thereto;

• “overseas territory” means any territory or country outside the United Kingdom;

• “the Pensions (Increase) Acts” means the M19 Pensions (Increase) Act 1971 and any Act passed after that Act for purposes corresponding to the purposes of that Act;

• “United Kingdom trust territory” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.

(8) In this section—

(a) M20 references to a government constituted for two or more countries include references to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more countries;

(b) M21 any reference to employment in the public services of an overseas territory shall be construed as if it occurred in the M22 Overseas Development and Cooperation Act 1980 and section 10(2) of that Act shall apply accordingly; and

(c) M23 any reference to an enactment or order having effect as if it were a scheme constituted under section 2 of the M24 Overseas Pensions Act 1973 includes a reference to a scheme made under that section and certified by the Secretary of State for the purpose of the 1970 Act or this Act to correspond to that enactment or order.

Textual Amendments

F1 Words in s. 615(2)(c) added (16.8.1991) by Oversea Superannuation Act 1991 (c. 16, SIF 101A:1), ss. 2, 3(2)

F2 Words in s. 615(6)(b) inserted (27.7.1999) by Finance Act 1999 (c. 16), Sch. 10 para. 11

Marginal Citations

M1 Source-1970 s.214(1), (3), 215(1), (2), 216(1), 217(1)

M2 Source-1970 s.214(1)(a); 1973 s.53(1)

M3 1955 c. 22.

M4 Source-1970 s.214(1)(b)

M5 Source-1970 s.214(1)(c), (d); 1973 s.53(1)

M6 1973 c. 21.

M7 Source-1970 s.251(1); 1973 s.53(2)

M8 1958 c. 14.

M9 Source-1970 s.216(1), (4)

M10 S.I. 1963/2085.

M11 Source-1970 s.217(1), (4)

M12 1966 c. 21.

M13 Source-1970 s.218(3)

M14 Source-1970 s.214(1); 1973 s.53(1)

M15 Source-1970 s.214(6); 1987 Sch.15 2(14)

M16 1981 c. 61.

M17 Source-1970 s.218(4)

M18 Source-1970 s.214(5), 215(3), 216(4), 217(4)

M19 1971 c. 56.

M20 Source-1970 s.214(5)

M21 Source-1970 s.215(3)

M22 1980 c. 63.

M23 Source-1973 c.53(2)

M24 1973 c. 21.