[F1(1)]M1A lump sum paid to a person [F2(whether on his retirement from an office or employment or otherwise)] shall not be chargeable to income tax under Schedule E if—
(a)it is paid in pursuance of any such scheme or fund as was described in section 221(1) and (2) of the 1970 Act or as is described in section 596(1) [F3and is not excepted from this paragraph by subsection (2) or (3) below]; or
(b)F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)it is paid under approved personal pension arrangements (within the meaning of Chapter IV of Part XIV).
[F5(2)Subsection (1)(a) above does not apply to a payment of compensation for loss of office or employment, or for loss or diminution of emoluments, unless—
(a)the loss or diminution is due to ill-health, or
(b)the payment is properly regarded as earned by past service.
(3)Subsection (1)(a) above does not apply to a payment chargeable to tax under section 600 (payments not authorised by rules of scheme).]
Textual Amendments
F1S. 189 renumbered as s. 189(1) (with effect in accordance with s. 58(4) of the amending Act) by virtue of Finance Act 1998 (c. 36), s. 58(3), Sch. 9 Pt. 2 para. 1(2)
F21988(F) s.57 (which also amends 1973 s.14).Previously
“on his retirement from an office or employment”.
F3Words in s. 189(1)(a) substituted (with effect in accordance with s. 58(4) of the amending Act) by Finance Act 1998 (c. 36), s. 58(3), Sch. 9 Pt. 2 para. 1(3)
F4S. 189(b) repealed (with effect in accordance with s. 108 of the repealing Act) by Finance Act 1994 (c. 9), s. 108(7), Sch. 26 Pt. 5(12), Note 1
F5S. 189(2)(3) inserted (with effect in accordance with s. 58(4) of the amending Act) by Finance Act 1998 (c. 36), s. 58(3), Sch. 9 Pt. 2 para. 1(4)
Marginal Citations
M1Source—1973 s.14; 1987 Sch.2 3