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HMRC internal manual

Employment Income Manual

Employer-financed retirement benefits scheme: example: payment on death by accident

Section 393B ITEPA 2003

[Notice: for events occurring after 5 April 2011 the example on this page should be read with the notice at the top of EIM15015]

An employee died on 30 April 2006 after falling from the roof at home at the weekend. The employer decides to make an ex-gratia payment of £25,000 to the spouse and does so on 1 June 2006. Since the payment is made after 5 April 2006, you consider the employer-financed retirement benefits scheme rules (see EIM15010).

The payment is not chargeable because only ‘relevant benefits’ from such a scheme are chargeable under Section 394 ITEPA 2003 and such a payment is not within that definition for employer-financed retirement benefits scheme purposes (see EIM15021).

The fact that an accident happens whilst the employee is off duty at home does not matter: the accident is ‘during service’ if it happens at any time while she or he is an employee.

For payments on death otherwise than by accident, see example EIM15310.