Income and Corporation Taxes Act 1988

CHAPTER II U.K. OTHER PENSION FUNDS AND SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS

613 Parliamentary pension funds. U.K.

(1) M1 The salary of a Member of the House of Commons shall, for all the purposes of the Income Tax Acts, be treated as reduced by the amounts deducted in pursuance of section 1 of the M2 House of Commons Members’ Fund Act 1939; but a Member shall not by reason of any such deduction be entitled to relief under any other provision of the Income Tax Acts.

(2) In subsection (1) above the reference to salary shall be construed as mentioned in subsection (3) of section 1 of the House of Commons Members’ Fund Act 1939, the reference to amounts deducted includes a reference to amounts required to be set aside under that subsection, and “deduction” shall be construed accordingly.

(3) Periodical payments granted out of the House of Commons Members’ Fund (including periodical payments granted out of sums appropriated from that Fund or out of the income from those sums) shall be charged to income tax under Schedule E.

(4) M3 The respective trustees of—

(a) the House of Commons Members’ Fund established under section 1 of that Act of 1939;

(b) the Parliamentary Contributory Pension Fund;

[F1 (bb) any fund maintained for the purposes of a pension scheme—

(i) established for members of the Scottish Parliament under section 81(4) of the Scotland Act 1998,

(ii) established for members of the Welsh Assembly under section 18(2) of the Government of Wales Act 1998, or

(iii) established for members of the Northern Ireland Assembly under section 48(2) of the Northern Ireland Act 1998;]

(c) the Members’ Contributory Pension (Northern Ireland) Fund constituted under section 3(2) of the M4 Ministerial Salaries and Members’ Pensions Act (Northern Ireland) 1965; and

(d) the Assembly Contributory Pension Fund constituted under the M5 Assembly Pensions (Northern Ireland) Order 1976;

shall be entitled to exemption from income tax in respect of all income derived from those [F2 funds] or any investment of those [F2 funds].

A claim under this subsection shall be made to the Board.

Textual Amendments

F1 S. 613(4)(bb) inserted (with effect in accordance with s. 52(2) of the amending Act) by Finance Act 1999 (c. 16), Sch. 5 para. 4

F2 Words in s. 613(4) substituted (with effect in accordance with s. 52(2) of the amending Act) by Finance Act 1999 (c. 16), Sch. 5 para. 4

Marginal Citations

M1 Source-1970 s.211(1), (4)

M2 1939 c. 49.

M3 Source-1970 s.211(2) 1981 s.50(1); PPA 1987 Sch.3 2(1)

M4 1965 c. 18 (N.I.).

M5 S.I. 1976/1779.

614 Exemptions and reliefs in respect of income from investments etc. of certain pension schemes. U.K.

(1) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) M6 Any interest or dividends received by the person in whom is vested any of the Family Pension Funds mentioned in section 273 of the M7 Government of India Act 1935, and having effect as a scheme made under section 2 of the M8 Overseas Pensions Act 1973, on sums forming part of that fund shall be exempt from income tax.

[F4 (2A) The reference in subsection (2) above to interest on sums forming part of a fund include references to any amount which is treated as income by virtue of paragraph 1 of Schedule 13 to the Finance Act 1996 (relevant discounted securities) and derives from any investment forming part of that fund.]

(3) M9 Income derived from investments or deposits of any fund referred to in paragraph (b), (c), (d) or (f) of subsection (2) of section 615 shall not be charged to income tax, and any income tax deducted from any such income shall be repaid by the Board to the persons entitled to receive the income.

(4) M10 In respect of income derived from investments or deposits of the Overseas Service Pensions Fund established pursuant to section 7(1) of the M11 Overseas Aid Act 1966, the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.

(5) M12 In respect of dividends and other income derived from investments, deposits or other property of a superannuation fund to which section 615(3) applies the Board shall give by way of repayment such relief from income tax as is necessary to secure that the income is exempt to the like extent (if any) as if it were income of a person not domiciled, ordinarily resident or resident in the United Kingdom.

(6) M13 A claim under this section shall be made to the Board.

Textual Amendments

F3 S. 614(1) repealed (3.5.1994) by Finance Act 1994 (c. 9), Sch. 26 Pt. 5(22)

F4 S. 614(2A) inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 34 (with Sch. 15)

Marginal Citations

M6 Source-1970 s.213(1)

M7 1935 c. 2.

M8 1973 c. 21.

M9 Source-1970 s.214(2), 216(2); 1973 s.53(1)

M10 Source-1970 s.217(2), (4)

M11 1966 c. 21.

M12 Source-1970 s.218(1)

M13 Source-1970 s.212(3), 213(1), 214(3), 216(2), 217(2), 218(1); 1987 Sch.15 2(13)

615 Exemption from tax in respect of certain pensions. U.K.

(1) M14 A pension to which this subsection applies shall not be liable to charge to income tax if it is the income of a person who satisfies the Board that he is not resident in the United Kingdom.

A claim under this subsection shall be made to the Board.

(2) Subsection (1) above applies to any of the following pensions—

(a) M15 a pension paid under the authority of the M16 Pensions (India, Pakistan and Burma) Act 1955 (which has effect, by virtue of subsection (3) of section 2 of the Overseas Pensions Act 1973, as a scheme made under that section);

(b) M17 a pension paid out of any fund established in the United Kingdom by the government of any country which is, or forms part of, a country to which this paragraph applies, an associated state, a colony, a protectorate, a protected state or a United Kingdom trust territory, or by a government constituted for two or more such countries, if the fund was established for the sole purpose of providing pensions, whether contributory or not, payable in respect of service under that government;

(c) M18 a pension paid out of the fund formed under the Overseas Superannuation Scheme (formerly known as the Colonial Superannuation Scheme); [F5 or which would have been so paid had section 2(2)(e) and (4A) of the Overseas Pensions Act 1973 not been enacted;]

(d) a pension paid under section 1 of the M19 Overseas Pensions Act 1973, whether or not paid out of a fund established under a scheme made under that section;

(e) M20 so much of any pension paid to or in respect of any person—

(i) under an order made under section 2 of the M21 Overseas Service Act 1958 and having effect as if it were a scheme under section 2 of the Overseas Pensions Act 1973 or under a pension scheme originally provided and maintained under such an order and having such effect, or

(ii) under section 4(2) of the Overseas Service Act 1958, which has effect as if it were a scheme under section 2 of the Overseas Pensions Act 1973,

as may be certified by the Secretary of State to be attributable to the employment of that person in the public services of an overseas territory;

(f) M22 a pension paid out of the fund established under the name “the Central African Pension Fund” by section 24 of the M23 Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963;

(g) M24 a pension paid out of the Overseas Service Pensions Fund established under section 7(1) of the M25 Overseas Aid Act 1966.

(3) M26 Where an annuity is paid from a superannuation fund to which this subsection applies to a person who is not resident in the United Kingdom, income tax shall not be deducted from any payment of the annuity or accounted for under section 349(1) by the trustees or other persons having the control of the fund.

(4) M27 Subsection (1) above shall not apply to so much of any pension falling within paragraph (a) or (d) of subsection (2) above as is paid by virtue of the application to the pension of the Pensions (Increase) Acts.

(5) M28 Paragraph (b) of subsection (2) above applies to any country mentioned in Schedule 3 to the M29 British Nationality Act 1981 except Australia, Canada, New Zealand, India, Sri Lanka and Cyprus.

(6) M30 Subsection (3) above applies to any superannuation fund which—

(a) is bona fide established under irrevocable trusts in connection with some trade or undertaking carried on wholly or partly outside the United Kingdom;

(b) has for its sole purpose [F6 (subject to any enactment or Northern Ireland legislation requiring or allowing provision for the value of any rights to be transferred between schemes or between members of the same scheme)] the provision of superannuation benefits in respect of persons’ employment in the trade or undertaking wholly outside the United Kingdom; and

(c) is recognised by the employer and employed persons in the trade or undertaking;

and for the purposes of this subsection duties performed in the United Kingdom the performance of which is merely incidental to the performance of other duties outside the United Kingdom shall be treated as performed outside the United Kingdom.

(7) M31 In this section—

• “pension” includes a gratuity or any sum payable on or in respect of death or, in the case of a pension falling within subsection (2)(g) above, ill-health, and a return of contributions with or without interest thereon or any other addition thereto;

• “overseas territory” means any territory or country outside the United Kingdom;

• “the Pensions (Increase) Acts” means the M32 Pensions (Increase) Act 1971 and any Act passed after that Act for purposes corresponding to the purposes of that Act;

• “United Kingdom trust territory” means a territory administered by the government of the United Kingdom under the trusteeship system of the United Nations.

(8) In this section—

(a) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) M33 any reference to an enactment or order having effect as if it were a scheme constituted under section 2 of the M34 Overseas Pensions Act 1973 includes a reference to a scheme made under that section and certified by the Secretary of State for the purpose of the 1970 Act or this Act to correspond to that enactment or order.

[F8 (9) For the purposes of this section, a person shall be taken to be employed in the public service of an overseas territory at any time when—

(a) he is employed in any capacity under the government of that territory, or under any municipal or other local authority in it,

(b) he is employed, in circumstances not falling within paragraph (a) above, by a body corporate established for any public purpose in that territory by an enactment of a legislature empowered to make laws for that territory, or

(c) he is the holder of a public office in that territory in circumstances not falling within either paragraph (a) or (b).

(10) For the purposes of subsection (9), references to the government of an overseas territory include references to a government constituted for two or more overseas territories, and to any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such territories.]

Textual Amendments

F5 Words in s. 615(2)(c) added (16.8.1991) by Oversea Superannuation Act 1991 (c. 16, SIF 101A:1), ss. 2, 3(2)

F6 Words in s. 615(6)(b) inserted (27.7.1999) by Finance Act 1999 (c. 16), Sch. 10 para. 11

F7 S. 615(8)(a)(b) repealed (17.6.2002) by International Development Act 2002 (c. 1), s. 20(2), Sch. 3 para. 9(2), Sch. 4 (with Sch. 5); S.I. 2002/1408, art. 2

F8 S. 615(9)(10) inserted (17.6.2002) by International Development Act 2002 (c. 1), s. 20(2), Sch. 3 para. 9(3) (with Sch. 5); S.I. 2002/1408, art. 2

Marginal Citations

M14 Source-1970 s.214(1), (3), 215(1), (2), 216(1), 217(1)

M15 Source-1970 s.214(1)(a); 1973 s.53(1)

M16 1955 c. 22.

M17 Source-1970 s.214(1)(b)

M18 Source-1970 s.214(1)(c), (d); 1973 s.53(1)

M19 1973 c. 21.

M20 Source-1970 s.251(1); 1973 s.53(2)

M21 1958 c. 14.

M22 Source-1970 s.216(1), (4)

M23 S.I. 1963/2085.

M24 Source-1970 s.217(1), (4)

M25 1966 c. 21.

M26 Source-1970 s.218(3)

M27 Source-1970 s.214(1); 1973 s.53(1)

M28 Source-1970 s.214(6); 1987 Sch.15 2(14)

M29 1981 c. 61.

M30 Source-1970 s.218(4)

M31 Source-1970 s.214(5), 215(3), 216(4), 217(4)

M32 1971 c. 56.

M33 Source-1973 c.53(2)

M34 1973 c. 21.

616 Other overseas pensions. U.K.

M35 (1) If and so long as provision is made by double taxation relief arrangements for a pension of a description specified in subsection (2) below to be exempt from tax in the United Kingdom and, by reason of Her Majesty’s Government in the United Kingdom having assumed responsibility for the pension, payments in respect of it are made under section 1 of the Overseas Pensions Act 1973, then, to the extent that those payments are made to, or to the widow or widower of, an existing pensioner, the provision made under the arrangements shall apply in relation to the pension, exclusive of any statutory increases in it, as if it continued to be paid by the government which had responsibility for it before that responsibility was assumed by Her Majesty’s Government in the United Kingdom.

(2) The pensions referred to in subsection (1) above are pensions paid by—

(a) the Government of Malawi for services rendered to that Government or to the Government of the Federation of Rhodesia and Nyasaland in the discharge of governmental functions;

(b) the Government of Trinidad and Tobago in respect of services rendered to that Government in the discharge of governmental functions;

(c) the Government of the Republic of Zambia for services rendered to that Government or to the Government of Northern Rhodesia or to the Government of the Federation of Rhodesia and Nyasaland in the discharge of governmental functions.

(3) If—

(a) immediately before 6th April 1973 a person resident in the United Kingdom was entitled to receive a pension as or as the widow or widower of an existing pensioner, and

(b) by reason of Her Majesty’s Government in the United Kingdom having assumed responsibility for the pension, payments in respect of it are made under section 1 of the M36 Overseas Pensions Act 1973,

then, if and so long as the pension is received by that person or, where that person is an existing pensioner, by his or her widow or widower, the provisions of this Act shall apply in relation to it, exclusive of any statutory increases in it, as if it continued to be paid by the government or other body or fund which had responsibility for it before that responsibility was assumed by Her Majesty’s Government in the United Kingdom.

(4) In this section—

• “double taxation relief arrangements” means arrangements specified in an Order in Council making any such provisions as are referred to in section 788;

• “existing pensioner”, in relation to a pension, means a person by virtue of whose service the pension is payable and who retired from that service before 6th April 1973; and

• “statutory increases”, in relation to a pension, means so much (if any) of the pension as is paid by virtue of the application to it of any provision of the M37 Pensions (Increase) Act 1971;

and in this subsection “pension” has the same meaning as in section 1 of the Overseas Pensions Act 1973.

Marginal Citations

M35 Source-1973 s.53(3)-(5), (9)

M36 1973 c. 21.

M37 1971 c. 56.

617 Social security benefits and contributions. U.K.

(1) Payments of benefit under [F9 Parts II to IV of the Social Security Contributions and Benefits Act 1992], [F10 or Parts II to IV of the Social Security Contributions and Benefits (Northern Ireland) Act 1992], except—

(a) sickness benefit, invalidity benefit, attendance allowance, [F11 mobility allowance,] [F12 disability living allowance,]severe disablement allowance, maternity allowance, [F13 bereavement payments,]F14 . . . child’s special allowance and guardian’s allowance; and

(b) so much of any benefit as is attributable to an increase in respect of a child,

shall be charged to income tax under Schedule E.

(2) M38 The following payments shall not be treated as income for any purpose of the Income Tax Acts—

(a) payments of income support, [F15 working families’ tax credit][F16 , [F17 disabled person’s tax credit]]or housing benefit under [F18 Part VII of the Social Security Contributions and Benefits Act 1992] or [F19 Part VII of the Social Security Contributions and Benefits (Northern Ireland) Act 1992] other than payments of income support which are taxable by virtue of section 151;

[F20 (aa) payments by way of an allowance under [F21 paragraph 18 of Schedule 7 to the Social Security Contributions and Benefits Act 1992] and [F22 paragraph 18 of Schedule 7 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992];]

[F23 (ab) payments of a jobseeker’s allowance, other than payments which are taxable by virtue of section 151A;

(ac) payments of a back to work bonus;]

[F24 (ad) payments of a child maintenance bonus;]

[F25 (ae) compensation payments made under regulations under section 24 of the Child Support Act 1995 or under any corresponding enactment having effect with respect to Northern Ireland;]

[F26 (af) payments made under regulations under section 79 of the Welfare Reform and Pensions Act 1999 or under any corresponding enactment having effect with respect to Northern Ireland;]

(b) payments of child benefit; and

(c) payments excepted by subsection (1) above from the charge to tax imposed by that subsection.

(3) M39 Subject to subsection (4) F27 . . . below, no relief or deduction shall be given or allowed in respect of any contribution paid by any person under—

(a) Part I of the Social Security [F28 Contributions and Benefits Act 1992], or

(b) Part I of the Social Security [F29 Contributions and Benefits (Northern Ireland) Act 1992].

[F30 (4) Subsection (3) above shall not apply to a contribution if it is a secondary Class 1 contribution [F31 , a Class 1A contribution or a Class 1B contribution](within the meaning of Part I of either of those Acts) and is allowable—

(a) as a deduction in computing profits or gains;

(b) as expenses of management deductible under section 75 or under that section as applied by section 76;

(c) as expenses of management or supervision deductible under section 121;

(d) as a deduction under section 198 from the emoluments of an office or employment; or

(e) as a deduction under section 332(3)(a) from the profits, fees or emoluments of the profession or vocation of a clergyman or minister of any religious denomination.]

(5) F32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F9 Words in s. 617(1) substituted (1.7.1992) by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 4, 7(2), Sch. 2 para. 93(2)

F10 Words in s. 617(1) substituted (1.7.1992) by Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), ss. 4, 7(2), Sch. 2 para. 33(2)

F11 Words in s. 617(1)(a) repealed (N.I.) (6.4.1992) by S.I. 1991/2874, art. 5; S.R. 1992/94, art. 2

F12 Words in s. 617(1)(a) inserted (3.2.1992 for certain purposes and 6.4.1992 so far as not in force) by Disablity Living Allowance and Disability Working Allowance Act 1991 (c. 21, SIF 113:1), s. 4(2), Sch. 2 para. 18; S.I. 1991/2167, art. 2(c)(f)

F13 Words in s. 617(1)(a) inserted (24.4.2000 for specified purposes and 9.4.2001 otherwise) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(1), Sch. 8 para. 1(2)(a); S.I. 2000/1047, art. 2(2)(a), Sch. Pt 1

F14 Words in s. 617(1)(a) repealed (24.4.2000 for specified purposes and 9.4.2001 otherwise) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(1), Sch. 8 para. 1(2)(b), Sch. 13 Pt. 5; S.I. 2000/1047, art. 2(2)(a), Sch. Pt. 1

F15 Words in s. 617(2)(a) substituted (5.10.1999) by Tax Credits Act 1999 (c. 10), s. 20(2), Sch. 1 paras. 1(a), 6(c) (with s. 19)

F16 Words in s. 617(2)(a) inserted (10.3.1992 for certain purposes and 6.4.1992 so far as not in force) by Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21, SIF 113:1), s. 7(2), Sch. 3 para. 11; S.I. 1991/2617, art. 2(e)(f)

F17 Words in s. 617(2)(a) substituted (5.10.1999) by Tax Credits Act 1999 (c. 10), s. 20(2), Sch. 1 paras. 1(b), 6(c) (with s. 19)

F18 Words in s. 617(2)(a) substituted (1.7.1992) by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 4, 7(2), Sch. 2 para. 93(3)(a)

F19 Words in s. 617(2)(a) substituted (1.7.1992) by Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), ss. 4, 7(2), Sch. 2 para. 33(3)(a)

F20 S. 617(2)(aa) inserted by virtue of Social Security Act 1988 (c. 7), s. 16, Sch. 4 para. 1 and S.I. 1988 No. 520 (not reproduced).

F21 Words in s. 617(2)(aa) substituted (1.7.1992) by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 4, 7(2), Sch. 2 para. 93(3)(b)

F22 Words in s. 617(2)(aa) substituted (1.7.1992) by Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), ss. 4, 7(2), Sch. 2 para. 33(3)(b)

F23 S. 617(2)(ab)(ac) inserted (7.10.1996) by Jobseekers Act 1995 (c. 18), Sch. 2 para. 16; S.I. 1996/2208, art. 2(b)

F24 S. 617(2)(ad) inserted (14.10.1996) by Child Support Act 1995 (c. 34), s. 30(4), Sch. 3 para. 1; S.I. 1996/2630, art. 2(1), Sch. Pt. 1

F25 S. 617(2)(ae) inserted (1.10.1995) by Child Support Act 1995 (c. 34), s. 30(4), Sch. 3 para. 1; S.I. 1995/2302, art. 2(2), Sch. Pt. 2

F26 S. 617(2)(af) inserted (25.4.2000) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(1), Sch. 12 para. 75; S.I. 2000/1047, art. 2(2)(b), Sch. Pt. 2

F27 Words in s. 617(3) repealed (with effect in accordance with s. 65(4) of the repealing Act) by Finance Act 1997 (c. 16), s. 65(2), Sch. 18 Pt. 6(5), Note

F28 Words in s. 617(3)(a) substituted (1.7.1992) by Social Security (Consequential Provisions) Act 1992 (c. 6), ss. 4, 7(2), Sch. 2 para. 93(4)

F29 Words in s. 617(3)(b) substituted (1.7.1992) by Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), ss. 4, 7(2), Sch. 2 para. 33(4)

F30 S. 617(4) substituted (with effect in accordance with s. 65(5) of the amending Act) by Finance Act 1997 (c. 16), s. 65(3)

F31 Words in s. 617(4) substituted (with effect in accordance with s. 61(2) of the amending Act) by Finance Act 1999 (c. 16), s. 61(1)

F32 S. 617(5) repealed (with effect in accordance with s. 147(3) of the repealing Act) by Finance Act 1996 (c. 8), s. 147(1), Sch. 41 Pt. 5(15), Note

F33 S. 617(6) repealed (24.4.2000 for specified purposes and 9.4.2001 otherwise) by Welfare Reform and Pensions Act 1999 (c. 30), s. 89(1), Sch. 8 para. 1(3), Sch. 13 Pt. 5; S.I. 2000/1047, art. 2(2)(a), Sch. Pt. 1

Modifications etc. (not altering text)

C1 See 1989 s.41—tax charged on amount accruing (1989-90and subsequent years of assessment).

C2 S. 617(5) excluded (N.I.)(1.7.1992) by Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), s. 15(3), Sch. 2 para. 3(2)(e)(with s. 108(5))

Marginal Citations

M38 Source-1970 s.219(2); 1987 s.29(1)

M39 Source-1970 s.219(3)

Valid from 08/07/2002

[F34 617A Tax credits under Part 1 of Tax Credits Act 2002 U.K.

Payments of a tax credit, within the meaning of the Tax Credits Act 2002, shall not be treated as income for any purpose of the Income Tax Acts.]

Textual Amendments

F34 S. 617A inserted (prosp.) by Tax Credits Act 2002 (c. 21), s. 61, Sch. 3 para. 14 (the insertion being brought into force at 6.4.2003 by S.I. 2003/962, art. 2(3)(d)(iii))