Commentary

31.6 Taxation of pension benefits received

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

31.6 Taxation of pension benefits received

| Commentary

31.6 Taxation of pension benefits received

Annuity payments and other pension benefits are generally taxable as income in the hands of the recipient under the Income Tax (Earnings and Pensions) Act 20031. In addition, a further charge to income tax (the ‘lifetime allowance charge’) may arise when there is what the legislation refers to as a ‘benefit crystallisation event’. This is broadly any event which leads to the taxpayer receiving a benefit from the pension scheme, for instance, where he becomes entitled to a scheme pension or a lifetime annuity purchased under a money arrangement2. In such a case, where

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