Part 9

Pension income
Chapter 17

Exemptions: any taxpayer

Pensions payable where employment ceased due to disablement
644
1
No liability to income tax arises on the exempt amount of a disablement pension.
2
For the purposes of this section a pension is a “disablement pension” if—
a
the pension is payable because a person has ceased to hold an employment or office because of disablement, and
b
that disablement is attributable to—
i
performance of the duties of the employment or office, or
ii
war injuries.
But “disablement pension” does not include any pension to which section 579A applies.
3
The exempt amount of a disablement pension is determined in accordance with the following steps.
Step 1
Determine what pension would have been payable if—
a
the person had ceased to hold the employment or office because of the disablement mentioned in subsection (2)(a), but
b
the disablement had not been attributable to—
i
performance of the duties of the employment or office, or
ii
war injuries.
Step 2
If no pension would have been payable, the exempt amount is the amount of the disablement pension.
If a pension of a smaller amount than the disablement pension would have been payable, the exempt amount is the amount by which the disablement pension exceeds the smaller amount.
In any other case, the exempt amount is nil.
4
For the purposes of this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.
Pt. 9 excluded by 2004 c. 12, Sch. 36 para. 45A(1) (as inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 4 para. 19)
Pt. 9: power to amend conferred (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), s. 4(3)
Pt. 9 modified (31.10.2023) by The Registered Pension Schemes (Authorised Member Payments) Regulations 2023 (S.I. 2023/1012), regs. 1, 4
Word in s. 644(2) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 31 para. 13 (with Sch. 36)
Pt. 9 modified (6.4.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 (S.I. 2023/113), regs. 1(2), 23(2), 24(2), 26(2), 28(2) (with reg. 1(3))
Pt. 9 modified (14.9.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 (S.I. 2023/912), regs. 1(2), 9(2), 11(2), 16(2) (with reg. 1(3))
Pt. 9 modified (18.11.2024 for the tax year 2024-25 and subsequent tax years) by S.I. 2009/1171, reg. 5ZA (as inserted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 5(3) (with reg. 6))
Pt. 9 modified (13.2.2025 with effect in relation to the tax year 2024-25 and subsequent tax years) by The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52), regs. 1(2)(3), 4, 6, 7