Income Tax (Earnings and Pensions) Act 2003 (c. 1)

Part 6 U.K. Employment income: income which is not earnings or share-related

Chapter 3 U.K. Payments and benefits on termination of employment etc.

Exceptions and reductions U.K.

409 Exception for payments and benefits in respect of employee liabilities and indemnity insurance U.K.

(1) This Chapter does not apply to a payment or other benefit received by an individual if or to the extent that—

(a) in the case of a cash benefit, it is provided for meeting the cost of a deductible amount, or

(b) in the case of a non-cash benefit, it is or represents a benefit equivalent to the cost of paying a deductible amount.

(2) For the purposes of this section “deductible amount” means an amount which meets conditions A to C.

(3) Condition A is that the amount is paid by the individual.

(4) Condition B is that a deduction for the amount would have been allowed under section 346 from earnings from the relevant employment, if the individual still held the employment when the amount was paid.

(5) Condition C is that the amount is paid at a time which falls within the run-off period.

(6) In this section and section 410—

• “relevant employment” means the employment mentioned in section 401(1);

• “run-off period” means the period which—

  (a)

  starts with the day on which the relevant employment terminated, and

  (b)

  ends with the last day of the sixth tax year following the tax year in which the period started.