EIM15100 - Employer-financed retirement benefits schemes: cash benefits received

Section 393B(2)(a) ITEPA 2003

Most benefits from employer-financed retirement benefits schemes are paid as a lump sum. However, they may also take the form of a pension, an annuity or an annual payment, or be in non-cash form. These various payments are dealt with as follows:

• where the benefit is paid as a pension, or is any other kind of income within Part 9 ITEPA 2003 (see EIM75000 and subsequent guidance), it is taxed only under that Part - section 394 ITEPA 2003 does not tax any income that falls within Part 9, nor does Part 7A (see EIM45610)
• where the benefit is paid as a limited annual payment that is not within Part 9 ITEPA 2003 (see EIM75000 and subsequent guidance) it counts as employment income under section 394 ITEPA 2003 unless first charged under Part 7A (see EIM45000)
• where the benefit is paid as a lump sum ‘relevant benefit’ (see EIM15020) it counts as employment income under section 394 ITEPA 2003 (but see EIM15121 for exceptions), unless first charged under Part 7A (see EIM45000)
• where the benefit is in non-cash form, see EIM15120.

See EIM15055 for who is assessed.