Payments in respect of annuities1 are subject to income tax2. Where any qualifying annual payment charged with income tax under the relevant statutory provisions is payable, the person liable to make the payment must, on making the payment, deduct a sum representing the amount of income tax payable on it3. A sum representing income tax which is so deducted (or treated as deducted) at source from a payment is treated as income tax paid by the recipient4.
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