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HMRC internal manual

Employment Income Manual

Employer-financed retirement benefits schemes: winding up the scheme

[Notice: the guidance on this page should be read with the notice at the top of EIM15015]

Since 6 April 2006 a number of non-approved retirement benefit schemes that continue after 6 April 2006 as employer-financed retirement benefits schemes are being wound up.

Where it is decided to wind up a scheme then the payments made to individuals may be relevant benefits (see EIM15021). Where the recipient has not yet retired and the lump sum, gratuity or other benefit

  • is provided in circumstances where there is a clear link with retirement, or,
  • is provided in substitution for a payment that would have been made on or after retirement,

then, depending on the facts of the case, the lump sum, gratuity or other benefit may be paid ‘in anticipation of retirement’. There is no age limit applicable to the phrase ‘in anticipation of retirement’. A payment made in anticipation of retirement is a relevant benefit and will be chargeable under S394 ITEPA 2003.