More IHT 403

F_Watt

Sorry to add another question about form IHT 403, however a simple question really. On page 8 under Ref.20 (Income) what does "Annuities (income element)" mean by "income element" ? 
I have recently used my SIPP to buy an annuity which in my mind is income (taxed of course) so have included it in this box. Is this correct?

Keep_pedalling

Not sure what other elements annuities can have, but yes you include it in income.

NorthYorkie

In the case of a Purchased Life Annuity, some element of the receipts will be a return of capital and therefore not taxable.

poseidon1

NorthYorkie said:

In the case of a Purchased Life Annuity, some element of the receipts will be a return of capital and therefore not taxable.

Outside of annuities purchased from personal pension pots, very few people will have come across PLAs.

Interestingly and perhaps confusingly, it seems HMRC accept that when taking annual UFPLSs  from a pension pot, the entire amount ( 25% TFC + 75% taxable income ) is deemed to be income for the purposes of the gifts out of excess income exemption.

A little illogical given the disallowed capital element of a PLA.