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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Pensions paid by or on behalf of a person who is in the United Kingdom

Section 569 ITEPA 2003

Pensions arising in the United Kingdom chargeable by Section 569 ITEPA 2003A pension paid by a person or pension provider who is in the United Kingdom is chargeable under Section 569 unless it is covered by one of the other charging provisions in Part 9 ITEPA 2003.

The legislation does not consider the residence status of the pensioner. If a pensioner is resident in another state it is necessary to consider the terms of the relevant double taxation treaty. See DT224, DT1926, DT1927and EIM74403.
### Voluntary pensionsThe cases of Benyon v Thorpe (14TC1) and Stedeford v Beloe (16TC505) established the principle that pensions paid voluntarily by a former employer were not chargeable as income because they had the character of gifts. Section 570 ITEPA 2003 ensures that Section 569 will apply to any pension, which is voluntary or capable of being discontinued. Isolated gifts to former employees are unlikely to be pension income but could possibly be chargeable as employment income either as general earnings or because they are in connection with the termination of the employment (see

EIM00610 and EIM12805 onwards). For guidance on voluntary annual payments see EIM74011.
### Foreign pensionsPensions arising from sources outside the United Kingdom are generally chargeable to income tax under Section 573 ITEPA 2003, see


There is an exception to this rule. Pensions paid by certain foreign governments in the United Kingdom are chargeable to income tax under Section 615 ITEPA 2003 (see EIM74006).