EIM15125 - Employer-financed retirement benefits schemes: receipts excluded from charge: prior employer contributions made only before 6 April 2006

Paragraphs 53 and 54(1)-(2)(a) Schedule 36 FA 2004

[Notice: the guidance on this page should be read with the notice at the top of EIM15015]

A lump sum received after 5 April 2006 that is otherwise chargeable under Section 394 ITEPA 2003 (see EIM15010) is not chargeable if the employer has made no contributions to the scheme after 5 April 2006 provided that the employee has been taxed on employer contributions made before 6 April 2006 under Section 595 ICTA 1988 or Section 386 ITEPA 2003 (see SE15040 and EIM15412 respectively) and

Either

  • All of the income and gains of the scheme (whether as a non-approved scheme before 6 April 2006 or as an employer-financed scheme after on or after that date) have been within the charge to UK tax and
  • The lump sum is provided to the employee, a relative (see below) of the employee, the personal representatives of the employee, an ex-spouse of the employee, (from 5 December 2005) a former civil partner of the employee (see below) or any other individual designated by the employee

Or

  • The scheme was entered into before 1 December 1993 and has not been varied since then (see EIM15416 for the meaning of 鈥渧aried鈥�)

鈥淩elative鈥� means wife, husband or civil partner, widow, widower or surviving civil partner, child or dependant

鈥楩ormer civil partner鈥� means a member of a civil partnership that has been dissolved or annulled

Note:

  • If the employer made contributions only before 6 April 2006 and any of the conditions above are not met see EIM15129
  • If the employer made contributions to the scheme after 5 April 2006 as well as on or before that date, see EIM15128.