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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Employer-financed retirement benefits schemes: Extra-Statutory Concession A10: text

Until 6 April 2011, ‘foreign service’ relief was available under Extra-Statutory Concession A10 (see EIM13670).  The full text of ESC A10 was as follows:

‘Income tax is not charged on lump sum relevant benefits receivable by an employee (or by his personal representatives or any dependant of his) from an Overseas Retirement Benefits Scheme or an Overseas Provident Fund where the employee’s overseas service comprises

  1. not less than 75 per cent of his total service in that employment; or
  2. the whole of the last 10 years of his service in that employment, where total service exceeds 10 years; or
  3. not less than 50 per cent of his total service in that employment, including any 10 of the last 20 years, where total service exceeds 20 years.

If the employee’s overseas service is less than described above, relief from income tax will be given by reducing the amount of the lump sum which would otherwise be chargeable by the same proportion as the overseas service bears to the employee’s total service in that employment.

In addition, income tax is not charged on lump sum relevant benefits receivable by an employee (or by his personal representatives or any dependant of his) from any superannuation fund accepted as being within Section 615 ICTA 1988.

For the purposes of this concession, the term ‘relevant benefits’ has the meaning given in Section 612(1) ICTA 1988 and the term ‘overseas service’ shall be construed in accordance with the definition of ‘foreign service’ found at paragraph 10 Schedule 11 ICTA 1988.’

Notes

  • For more details on the application of ESC A10 to Section 615 schemes see EIM15084.
  • For the definition of relevant benefits see EIM15021.
  • For the definition of ‘foreign service’ see EIM13690.
  • There are examples at EIM15326.