- Pension income either through lifetime annuity, scheme pension or drawdown is taxed as 'Earned Income'. This means that the payer of the income must operate Pay As You Earn (PAYE). This means that they will pay out the income based on a tax code supplied by HMRC.
- What tax code is returned will depend on each individual's circumstances.
- The Taxation of Pensions Act 2014 introduced a new type of pension payment: Uncrystallised Funds Pension Lump Sum. Although UFPLS do not generate pension income there are tax implications.
- The introduction of Scottish and Welsh rates of Income Tax (SRIT/ CRIT) will have an impact on those individuals defined as Scottish or Welsh Rate tax payers.