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HMRC internal manual

Employment Income Manual

Employment income: exemption for long service testimonial awards: form of qualifying awards

Section 323(3) ITEPA 2003

The main conditions for exemption under Section 323 ITEPA 2003 are set out in EIM01500. One of the conditions is that the award must be in a form that satisfies the condition in Section 323(3). That is, the award must be in the form of:

  • tangible moveable property, or
  • shares in the company that employs the person receiving the award, or in a company in the same group as the employer, or
  • any other benefit except:

    • a payment
    • a cash voucher
    • a credit token
    • securities
    • shares other than those mentioned above and
    • an interest in or rights over securities or shares.

The exclusion of payments and cash vouchers rules out cash and cheque payments, National Savings Certificates, premium bonds and so on. Shares and securities are excluded unless they fall within the second bullet above. Subject to that, and to the monetary limit in EIM01501, most non-cash awards are likely to qualify for the exemption.