PART V PROVISIONS RELATING TO THE SCHEDULE E CHARGE
CHAPTER III PROFIT-RELATED PAY
The relief
171 Relief from tax.
M11
One half of any profit-related pay to which this section applies shall be exempt from income tax.
2
This section applies to any profit-related pay paid to an employee by reference to a profit period and in accordance with a registered scheme, but only so far as it does not exceed the lower of the two limits specified in the following provisions of this section.
3
The first of the limits referred to in subsection (2) above is one fifth of the aggregate of—
a
the pay (but not any profit-related pay) paid to the employee in the profit period in respect of his employment in the employment unit concerned (or, if the employee is eligible to receive profit-related pay by reference to part only of the period, so much of his pay, but not any profit-related pay, as is paid in that part); and
b
the profit-related pay paid to him by reference to that period in respect of that employment.
4
The second of the limits referred to in subsection (2) above is F1£4,000 (or, if the profit period is less than 12 months, or the employee is eligible to receive profit-related pay by reference to part only of the profit period, a proportionately reduced amount).