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HMRC internal manual

Inheritance Tax Manual

Waiver or repayment of an amount of remuneration

IHTA84/S14 provides for relief when an employee waives or repays to the employer an amount of remuneration. If both the following conditions are satisfied, under IHTA84/S14 the repayment or waiver is not a transfer of value. (IHTM04024) The section applies only

  • to remuneration assessable under Schedule E, and
  • if the remuneration waived or repaid is disallowed as a deduction in computing the employer’s profits for income tax or corporation tax, or is brought into the charge for these purposes. You should obtain confirmation of this before accepting that the section applies.There is no time limit on the waiver or repayment.

Remuneration under Schedule EThere is a distinction between ‘remuneration’, the word used in IHTA84/S14, and pensions, which are also assessable under Schedule E, see ICTA88/S833 (4)(a). Accordingly, it is considered that IHTA84/S14 does not apply to pensions. Any case where this is disputed should be referred to TG

Certain foreign remuneration attracts a 100% deduction for the purposes of the Schedule E charge. Though not in fact chargeable to tax, it may be assessable and that is enough to bring it within IHTA84/S14.