Part 9Pension income

Chapter 2Tax on pension income

567Amount charged to tax

1

The amount of pension income which is charged to tax under this Part for a particular tax year is as follows.

2

In relation to each pension, annuity or other item of pension income, the amount charged to tax is the “net taxable pension income” for the tax year.

3

The net taxable pension income for a pension, annuity or other item of pension income for a tax year is given by the formula—

TPI-DPImath

where—

  • TPI means the amount of taxable pension income for that pension, annuity or item of pension income for that year (see subsection (4)), and

  • DPI means the total amount of any deductions allowed from the pension, annuity or item of pension income (see subsection (5)).

4

For the purposes of this Act—

a

the amount of taxable pension income for a pension, annuity or other item of pension income for a tax year is determined in accordance with Chapters 3 to 15 of this Part (which contain provisions relating to this amount for each type of pension income); and

b

in determining the amount of taxable pension income for a pension, annuity or other item of pension income, any exempt income is to be excluded.

5

The deductions allowed from a pension, annuity or other item of pension income are those under—

  • section 617 (10% deduction from an overseas government pension to which section 615 applies);

  • Part 12 (payroll giving).