Part 6Employment income: income which is not earnings or share-related
Chapter 2Benefits from non-approved pension schemes
Benefits treated as employment income
395Application of sections 396 and 397: general rules
1
Section 394 is subject to—
a
section 396 (which provides that certain lump sums are not taxed by virtue of section 394), and
b
section 397 (which provides for the calculation of the amount taxed by virtue of section 394 in relation to certain lump sums).
2
Section 396 applies in relation to a lump sum only if the condition in subsection (4) below is met.
3
Section 397 applies in relation to a lump sum only if—
a
the condition in subsection (4) below is met, or
b
an employee has paid any sum or sums with a view to the provision of any relevant benefits under the scheme under which the lump sum is provided.
4
The condition mentioned in subsections (2) and (3)(a) is that—
a
an employer has paid any sum or sums with a view to the provision of any relevant benefits under the scheme under which the lump sum is provided, and
b
an employee has been assessed to tax in respect of the sum or sums so paid—
i
by virtue of section 595(1) of ICTA, or
ii
by virtue of the sum or sums counting as employment income of the employee under section 386(1) of this Act.
5
For the purposes of this section it must be assumed that, unless the contrary is shown—
a
no sums have been paid with a view to the provision of relevant benefits, and
b
an employee has not been assessed in respect of a sum or sums as mentioned in subsection (4)(b).