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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, the repayment or waiver is not a transfer of value (IHTM04024) because of S14. The section applies only

  • to remuneration that would be earnings, or would be treated as earnings, and would constitute mployment income under the Income Tax (Earnings and Pensions) Act 2003/S7 2(a) and (b),
  • 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.

There is a distinction between ‘remuneration’, the word used in IHTA84/S14, and pensions.  Accordingly, it is considered that IHTA84/S14 does not apply to pensions. Any case where this is disputed should be referred to Technical.

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