Policy paper

Taxation of Lump Sum Exit Scheme payments

This measure intends to clarify the tax treatment of payments received under the Lump Sum Exit Scheme.

• From: HM Revenue & Customs
• Published: 15 March 2023

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Taxation of the Lump Sum Exit Scheme payments

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This measure will apply to you if you are leaving or retiring from farming and have applied for a payment under the Lump Sum Exit Scheme managed by the Rural Payments Agency.

This measure clarifies that the payment, and any interim payment received, will be treated as a capital receipt provided you meet the scheme’s eligibility criteria. If you do not meet the eligibility criteria the payment will be treated as income.

Published 15 March 2023