Income and Corporation Taxes Act 1988

[F1 148 Payments and other benefits in connection with termination of employment, etc. U.K.

(1) Payments and other benefits not otherwise chargeable to tax which are received in connection with—

(a) the termination of a person’s employment, or

(b) any change in the duties of or emoluments from a person’s employment,

are chargeable to tax under this section if and to the extent that their amount exceeds £30,000.

(2) For the purposes of this section a “benefit” includes anything which, if received for performance of the duties of the employment—

(a) would be an emolument of the employment, or

(b) would be chargeable to tax as an emolument of the employment,

or which would be such an emolument, or so chargeable, apart from any exemption.

(3) An amount chargeable to tax under this section is income chargeable under Schedule E for the year of assessment in which the payment or other benefit is received.

The right to receive the payments or other benefits is not itself regarded as a benefit for this purpose.

(4) For the purposes of this section—

(a) a cash benefit is treated as received—

(i) when payment is made of or on account of the benefit, or

(ii) when the recipient becomes entitled to require payment of or on account of the benefit; and

(b) a non-cash benefit is treated as received when it is used or enjoyed.

(5) This section applies—

(a) whether the payment or other benefit is provided by the employer or former employer or by another person, and

(b) whether or not the payment or other benefit is provided in pursuance of a legal obligation.

(6) This section has effect subject to Schedule 11, which contains provisions extending, restricting and otherwise supplementing the provisions of this section.

(7) In this section and that Schedule “employment” includes an office and related expressions have a corresponding meaning.]

Textual Amendments

F1 S. 148 substituted (with application in accordance with s. 58(4) of the amending Act) by Finance Act 1998 (c. 36), s. 58(1)

Modifications etc. (not altering text)

C1 S. 148 restricted by Finance Act 1995 (c. 4), s. 92(10) (as substituted (with application in accordance with s. 58(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 9 para. 5)