Part 9Pension income
Chapter 10Other employment-related annuities
609Annuities for the benefit of dependants
1
This section applies to any annuity which was granted for consideration consisting in whole or in part of sums F10—
a
which, in the tax year 2012-13 or an earlier tax year, satisfied the conditions for relief under section 273 of ICTA or section 459 of ITA 2007 (obligatory contributions to secure an annuity for the benefit of dependants), or
b
which fall within subsection (3)
2
But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.
F93
A sum falls within this subsection if—
a
in the tax year 2013-14 or a later tax year, the sum is paid by an individual, or is deducted from an individual's earnings, under an Act or the individual's terms and conditions of employment,
b
the sum is for the purpose of—
i
securing a deferred annuity after the individual's death for the individual's surviving spouse or civil partner, or
ii
making provision after the individual's death for the individual's children, and
c
the individual—
i
is UK resident for the tax year in which the sum is paid or deducted, or
ii
at any time in that tax year, falls within any of paragraphs (a) to (f) of section 460(3) of ITA 2007 (matters relating to residence).
4
Subsection (3)(a) does not cover contributions paid by a person under—
a
Part 1 of the Social Security Contributions and Benefits Act 1992, or
b
Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
5
In subsection (3)(a) “earnings” has the meaning given by section 62.
610Annuities under F3non-registered occupational pension schemes
1
This section applies to—
a
any annuity paid under F4an occupational pension scheme that is not a registered pension scheme, and
b
any annuity acquired using funds held for the purposes of F5such an occupational pension scheme.
2
But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.
3
This section does not apply to an annuity to which F6Chapter 5A of this Part applies.
F74
In this section “occupational pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(5) of that Act).
611Annuities in recognition of another’s services
1
This section applies to any annuity purchased by any person in recognition of another person’s services in any office or employment.
2
But this section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom.
3
This section does not apply to an annuity to which F8Chapter 5A of this Part applies.
4
For the purposes of this section “office” includes in particular any position which has an existence independent of the person who holds it and may be filled by successive holders.
612Taxable pension income: UK annuities
1
The taxable pension income for an annuity to which section 609, 610 or 611 applies is determined in accordance with this section if the annuity arises from a source in the United Kingdom.
2
The taxable pension income for a tax year is the full amount of the annuity arising in that year.
613Taxable pension income: foreign annuities
1
The taxable pension income for an annuity to which section 609, 610 or 611 applies is determined in accordance with this section if the annuity arises from a source outside the United Kingdom.
2
The taxable pension income for a tax year is F2the full amount of the annuity arising in the tax year, but subject to subsections (3) and (4).
F13
The full amount of the annuity arising in the tax year is to be calculated on the basis that the annuity is 90% of its actual amount, unless as a result of subsection (4) the annuity is charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis).
4
The annuity is treated as relevant foreign income for the purposes of Chapters 2 and 3 of Part 8 of that Act (relevant foreign income: remittance basis and deductions and reliefs).
5
But if the annuity arises in the Republic of Ireland, section 839 of that Act (annual payments payable out of relevant foreign income) applies with the omission of condition B and subsection (5)(a).
6
See also Chapter 4 of that Part (unremittable income).
614Person liable for tax
If section 609, 610 or 611 applies, the person liable for any tax charged under this Part is the person receiving or entitled to the annuity.