PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
CHAPTER IV SPECIAL PROVISIONS
313 Taxation of consideration for certain restrictive undertakings.
F1M11
Where an individual who holds, has held, or is about to hold, an office or employment gives in connection with his holding that office or employment an undertaking (whether absolute or qualified, and whether legally valid or not) the tenor or effect of which is to restrict him as to his conduct or activities, any sum to which this section applies shall be treated as an emolument of the office or employment, and accordingly shall be chargeable to tax under Schedule E, for the year of assessment in which it is paid.
2
This section applies to any sum which—
a
is paid, in respect of the giving of the undertaking or its total or partial fulfilment, either to the individual or to any other person; and
b
would not, apart from this section, fall to be treated as an emolument of the office or employment.
3
Where the individual has died before the payment of any sum to which this section applies, subsections (1) and (2) above shall have effect as if that sum had been paid immediately before his death.
4
Where valuable consideration otherwise than in the form of money is given in respect of the giving of the undertaking or its total or partial fulfillment, subsections (1) to (3) above shall have effect as if a sum had instead been paid equal to the value of that consideration.
5
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In this section—
a
“office or employment” means any office or employment whatsoever such that the emoluments thereof, if any, are or would be chargeable to income tax under Case I or II of Schedule E; and
b
references to the giving of valuable consideration do not include references to the mere assumption of an obligation to make over or provide valuable property, rights or advantages, but do include references to the doing of anything in or towards the discharge of such an obligation.