EIM74305 - Pensions: particular occupations: armed forces: statutory exemption for specified pensions in respect of death due to military or war service

Exempt pensions and allowances: Section 639 ITEPA 2003

The following types of pension or allowance payable to war widows or other dependants are exempt from tax:

  • pensions or allowances payable by or on behalf of the Ministry of Defence under a specified instrument relating to death due to:
  • service in the armed forces of the Crown,
  • wartime service in the merchant navy, or
  • war injuries
  • pensions or allowances payable at similar rates by the Ministry of Defence in respect of death due to peace-time service in the armed forces of the Crown before 3 September 1939
  • any pension or allowance of a similar character payable under the law of a foreign country.
  • The specified instruments are:
  • Defence (Local Defence Volunteers) Regulations 1940 (S.R. & O. 1940/748)
  • War Pensions (Coastguards) Scheme 1944 (S.R. & O. 1944/500)
  • War Pensions (Naval Auxiliary Personnel) Scheme 1964 (S.I. 1964/1985)
  • Pensions (Polish Forces) Scheme 1964 (S.I. 1964/2007)
  • War Pensions (Mercantile Marine) Scheme 1964 (S.I. 1964/2058)
  • Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Home Guard (1964 Cmnd. 2563)
  • Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Home Guard after 27th April 1952 (1964 Cmnd. 2564)
  • Order by Her Majesty concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment (1971 Cmnd. 4567)
  • Personal Injuries (Civilians) Scheme 1983 (S.I. 1983/686)
  • Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983 (S.I. 1983/883)

Where part of a pension or allowance exempted by Section 639 is withheld because of the receipt of another pension or allowance, Section 640 ITEPA 2003 provides that part of the other pension or allowance equal to the amount withheld is also exempt from tax.

See EIM74306 for guidance in cases where death was caused by service in the armed forces on or after 6 April 2005.