PART V PROVISIONS RELATING TO THE SCHEDULE E CHARGE
CHAPTER IV OTHER EXEMPTIONS AND RELIEFS
Retirement benefits etc.
188 Exemptions from section 148.
F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
189 Lump sum benefits on retirement.
F2(1)
M1A lump sum paid to a person F3(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) F4and is not excepted from this paragraph by subsection (2) or (3) below; or
(b)
F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)
it is paid under approved personal pension arrangements (within the meaning of Chapter IV of Part XIV).
F6(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).
F7190Payments to MPs and others.
(1)
Grants and payments to which this section applies shall be exempt from income tax under Schedule E as emoluments, but without prejudice to any charge to tax under section 148 (payments in connection with termination of employment, etc.).
(2)
This section applies to grants and payments if they are made—
(a)
in pursuance of a resolution of the House of Commons to a person ceasing to be a member of that House on a dissolution of Parliament;
(b)
under section 13 of the M2Parliamentary Pensions etc. Act 1984 or section 4 of the M3Ministerial and other Pensions and Salaries Act 1991 (grants to persons ceasing to hold certain Ministerial and other offices); or
(c)
under section 3 of the M4European Parliament (Pay and Pensions) Act 1979 (resettlement grants for persons ceasing to be Representatives).
(3)
This section also applies to grants and payments if they are not pension payments and they are made—
(a)
under section 81(3) of the M5Scotland Act 1998—
(i)
to a person ceasing to be a member of the Scottish Parliament on the dissolution of the Scottish Parliament, or
(ii)
to a person ceasing to hold an office corresponding to a relevant office;
(b)
under section 18(1) of the M6Government of Wales Act 1998 to a person ceasing to be a member of the National Assembly for Wales on the expiry of his term of office; or
(c)
under section 48(1) of the M7Northern Ireland Act 1998—
(i)
to a person ceasing to be a member of the Northern Ireland Assembly on the dissolution of the Assembly, or
(ii)
to a person ceasing to hold an office corresponding to a relevant office.
(4)
In subsection (3) above “a relevant office” has the same meaning as in section 4 of the M8Ministerial and other Pensions and Salaries Act 1991.
191 Job release scheme allowances not to be treated as income.
M9(1)
A payment on account of an allowance to which this section applies shall not be treated as income for any purposes of the Income Tax Acts.
(2)
This section applies to any allowance paid since the beginning of 1977 by the Secretary of State or the Department of Economic Development under any scheme of the kind described in the M10Job Release Act 1977, being a scheme which provides for the payment of allowances for periods beginning not earlier than one year before the date on which the recipient attains pensionable age as defined in that Act.