How are the payments from a registered pension scheme taxed?
Registered pension schemes qualify for tax reliefs and exemptions. This is to encourage individuals to join pension schemes as a means for saving towards an income in retirement. In order to ensure that these tax reliefs and exemptions are put to their intended use of helping save toward an income in retirement, the tax rules for registered pension schemes put conditions on the types of payments that can be made to or in respect of the members of such schemes. Payments that fall within these conditions are called authorised member payments. Payments that do not fall within these conditions are called unauthorised member payments. What sort of payment you receive from a registered pension – an authorised member payment or an unauthorised member payment – will determine the tax treatment of that payment. Broadly, the authorised member payments you are most likely to receive will be a pension and a lump sum; the pension will be liable to income tax and the lump sum will probably be tax-fr
