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.
