Income Tax (Earnings and Pensions) Act 2003 section 572A

Temporary non-residents

Section 572A deals with the UK tax treatment of lump sum pension payments from UK pension schemes received by individuals who leave the UK temporarily and then return.

• The section targets lump sum payments from UK pensions (within section 569) received during a temporary period of non-residence
• If the lump sum escaped UK tax only because of a double taxation treaty, it is treated as accruing in the tax year the individual returns to the UK
• Even if no formal claim for double taxation relief has been made, the lump sum is caught if such a claim could have been made to avoid the UK tax charge
• No double taxation treaty can override the resulting UK income tax charge that arises when the pension is treated as accruing in the period of return