Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
, see all updates

Employer-financed retirement benefits schemes: cash benefits received

Section 393B(2)(a) ITEPA 2003

Most benefits from employer-financed retirement benefits schemes are paid as a lump sum. However, they may also take the form of a pension, an annuity or an annual payment or be in non-cash form. These various payments are dealt with as follows:

  • Where the benefit is paid as a pension, or is any other kind of income within Part 9 ITEPA 2003 (see EIM74000 and subsequent guidance), it is taxed only under that Part. Section 394 ITEPA 2003 does not tax any income that falls within Part 9, nor does Part 7A (see EIM45610).
  • Where the benefit is paid as an annuity or other annual payment and it is not within Part 9 ITEPA 2003 (see EIM74000 and subsequent guidance) it counts as employment income under Section 394 ITEPA 2003 unless first charged under part 7A (see EIM45000).
  • Where the benefit is paid as a lump sum “relevant benefit” (see EIM15020) it counts as employment income under Section 394 ITEPA 2003 (but see EIM15121 for exceptions), unless first charged under part 7A (see EIM45000).
  • Where the benefit is in non-cash form, see EIM15120.

See EIM15055 for who is assessed.