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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Computation: IT: payments on retirement/removal from office/employment

Where a lump sum payment is chargeable to tax under employment income by virtue of ICTA88/S148, see SE13000+ or EIM13000+, the abatement of £30,000 in computing the charge is regarded as `money …. taken into account as a receipt in computing income’ within TCGA92/S37 (1) . It is therefore NOT chargeable to Capital Gains Tax as a gain arising from the disposal of a right under a contract of service.