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Scottish rates of income tax

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The Scottish Rates of Income Tax (Consequential Amendments) Order, SI 2021/190, amends F(No. 2)A 2005 s 7(5A) to ensure that Scottish taxpayers who receive a social security pension lump sum are taxed at the highest Scottish rate that would be applicable for a tax year if income tax were charged at Scottish rates on their income including savings and dividend income.

The order also makes a consequential amendment to the social security pension lump sum legislation to ensure it is clear that Scottish taxpayers pay income tax on the pension lump sum at the highest Scottish rate that would apply to an amount of income which includes their savings and dividend income, in the year the lump sum is received. Before this change the legislation could be interpreted as not taking account of any savings or dividend income of Scottish taxpayers, as tax on that income is not devolved. The order came into force on 25 February 2021.

Issue: 1522
Categories: News