- Latest available (Revised)
- Point in Time (18/04/2005)
- Original (As enacted)
Version Superseded: 06/04/2006
Point in time view as at 18/04/2005. This version of this provision has been superseded.
You are viewing this legislation item as it stood at a particular point in time. A later version of this or provision, including subsequent changes and effects, supersedes this version.
Note the term provision is used to describe a definable element in a piece of legislation that has legislative effect – such as a Part, Chapter or section.
Income Tax (Earnings and Pensions) Act 2003, Section 397 is up to date with all changes known to be in force on or before 25 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
(1)In a case where—
(a)section 394 applies to a lump sum, and
(b)any of the income or gains accruing to the scheme under which the lump sum is provided is not brought into charge to tax,
the amount which by virtue of that section counts as employment income, or is chargeable to tax under [F1subsection (2) of that section] , is determined in accordance with this section.
(2)That amount is the amount of the lump sum reduced by the deduction applicable under subsection (3) or (4).
(3)Subject to subsection (4), the deduction applicable is the aggregate of—
(a)the sum or sums mentioned in section 395(3)(b) (if any), and
(b)the sum or sums mentioned in section 395(4)(b) (if any),
which in either case were paid by way of contribution to the provision of the lump sum.
(4)The deduction applicable is calculated in accordance with the formula in subsection (6) if—
(a)the lump sum is provided under the scheme on the disposal of a part of any asset or the surrender of any part of or share in any rights in any asset, and
(b)a person falling within subsection (5) has a right to receive, or any expectation of receiving, a further lump sum or further lump sums under the scheme on a further disposal of any part of the asset or a further surrender of any part of or share in any rights in the asset.
(5)The persons referred to in subsection (4)(b) are—
(a)the employee,
(b)a relative of that employee,
(c)the personal representatives of that employee, or
(d)any person connected with that employee.
(6)The formula referred to in subsection (4) is—
where—
D is the deduction applicable;
S is the aggregate amount of any sum or sums of a description mentioned in paragraphs (a) and (b) of subsection (3);
LS is the amount of the lump sum received in relation to which the deduction applicable falls to be determined;
MVA is the market value of the asset in relation to which the disposal or surrender occurred, on the assumption that the valuation is made immediately before the disposal or surrender.
(7)An individual may not claim that a deduction is applicable in relation to a lump sum more than once.
(8)For the purposes of this section it must be assumed that, unless the contrary is shown—
(a)the income and gains accruing to the scheme are not brought into charge to tax, and
(b)no deduction is applicable under subsection (3) or (4).
(9)For the purposes of this section income and gains accruing to the scheme are not to be regarded as brought into charge to tax merely because tax is charged in relation to the scheme in accordance with section 591C of ICTA.
(10)In this section “market value” is to be construed in accordance with sections 272 and 273 of TCGA 1992.
Textual Amendments
F1Words in s. 397(1) substituted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 596 (with Sch. 2)
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: