725. Effect of annuities stated to be free of tax.

Income tax1 in respect of an annuity2 is a charge on the income of the recipient personally. Although the relevant statutory provisions require an annuity to be paid net of tax3, the basic rule is that it is the annuitant who is liable to income tax on an annuity4, unless there is a direction in the will that it is to be paid free of tax5.

However, a specific reference to freedom from taxes or freedom from deduction of taxes will be required to show that the annuity is to be free of income tax6. It is not sufficient if