| Employment Income: Emoluments |
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14A.5.4 ITEPA Section 403: The Special Regime for Payments Outside Section 62148 |
Payments or benefits149 received on retirement or removal from office or employment and which are not otherwise chargeable to tax are taxed under ITEPA section 403 if they exceed £30,000.150 Section 403 is a separate charging provision and can therefore apply even though the taxpayer left the UK and was neither resident nor ordinarily resident in the UK in the year in which the employment ended and the payment was made.151 The payments or benefits must be received directly or indirectly in consideration of, or in consequence of, or otherwise in connection with the termination or change.152 |
14A.5.4.1 Benefits |
If the package includes a continuing benefit, such as the use of a car, the benefit is taxable in the year in which it is enjoyed. The benefit is charged at the same rate as the individual’s rate for the year of enjoyment.153 |
14A.5.4.2 Scope |
A payment is caught even if it is made to the personal representatives of the holder or past holder of the office or employment, and even if it is paid to the spouse or any relative or dependant of his, as is a payment on his behalf or to his order.154 The employee is also taxable even where the benefit is received by another.155 |
14A.5.4.3 Timing |
Cash receipts are treated as received when the payment is made or the recipient is entitled to call for it. A non-cash benefit is treated as received when it is actually used or enjoyed.156 |