Commentary

E1.550 Annual payments under immediate needs annuities

Personal and employment tax

E1.550 Annual payments under immediate needs annuities

E1.550 Annual payments under immediate needs annuities

Some annual payments made under an immediate needs annuity are exempt from income tax. The exempt payments are those that are made for the benefit of a person protected under that annuity, and to a care provider1 or local authority in respect of the provision of care2 for that person3.

An immediate needs annuity is a contract for a purchased life annuity, the purpose, or one of the main purposes, of which is to protect a person against the consequences of the person being unable, at the time the contract is made, to live

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