PSI17.2.1 - Tax Treatment of Approved Schemes and Payments by Approved Schemes: Taxation of Payments to Scheme Members - Pensions - General

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

[PN17.1]

Section 597 ICTA 1988 applies to pensions “paid under any scheme which is approved or is being considered for approval”. All such pensions (including any amounts paid under income drawdown) whether payable to

• the member, his or her spouse or dependants, or
• an ex-spouse member, his or her spouse or dependants (see PSI Part 24)

are chargeable to tax under Schedule E (but see PSI17.2.10 about children’s pensions).

The person paying the pension is responsible for applying PAYE and accounting for the tax to the Revenue. This applies whether the pension is paid by the employer, the administrator or a Life Office from which an annuity under the scheme has been bought.