Part 6Employment income: income which is not earnings or share-related
Chapter 3Payments and benefits on termination of employment etc.
Exceptions and reductions
407Exception for payments and benefits under tax-exempt pension schemes
1
This Chapter does not apply to a payment or other benefit provided under a tax-exempt pension scheme if—
a
the payment or other benefit is by way of compensation—
i
for loss of employment, or
ii
for loss or diminution of earnings, and
the loss or diminution is due to ill-health, or
b
the payment or other benefit is properly regarded as earned by past service.
2
For this purpose “tax-exempt pension scheme” means—
F1a
a registered pension scheme,
aa
a scheme set up by a government outside the United Kingdom for the benefit of employees or primarily for their benefit, or
b
any such scheme or fund as was described in section 221(1) and (2) of ICTA 1970 (schemes to which payments could be made without charge to tax under section 220 of ICTA 1970).
F23
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