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HMRC internal manual

Employment Income Manual

Employment income provided through third parties: anti-forestalling rules: early step within Section 554C(1)(a) or (d): exclusion for transactions under employee benefit packages

Schedule 2 paragraph 55 FA 2011

If a relevant third person (P) takes an early step within Section 554C(1)(a) or (d) (see EIM45910 and EIM45915 respectively), it may be that one of the statutory exclusions will prevent the anti-forestalling rules from applying.

Section 554G (exclusions: employee benefit packages) applies with two modifications. The modifications are designed to ensure that the effect of the anti-forestalling provisions published on 9 December 2010 was not altered in a way that would disadvantage taxpayers.

This guidance discusses Section 554G at EIM45215 onwards.

These are the two modifications.

  Early step within Section 554C(1)(a) or (d) Relevant step taken on or after 6 April 2011
Pension schemes A pension scheme can count as an employee benefit package.  
See EIM45215. A pension scheme cannot count as an employee benefit package.
See EIM45215.    
  Definition of ‘group of companies’ ‘Group of companies’ means acompany and any other companies of which it has control (as defined in Section 995 ITA 2007).
See EIM45220. ‘Group of companies’ is defined as for corporation tax on chargeable gains except that in Section 554G the test is a 51% test rather than a 75% test.
See EIM45220.