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Section 401(1) ITEPA 2003

For a payment or other benefit to be chargeable under section 401 ITEPA 2003 it must be received (as defined in EIM13110) in connection with (as defined in EIM13012):

• the termination of an office or employment, or
• a change in the duties or earnings from an office or employment (see EIM00680)

and

• not be chargeable under any other section (see EIM12810)

»Ê¹ÚÌåÓýapp scope includes a payment made for giving up rights in a redundancy scheme even though no termination occurs when it is paid (as confirmed by the Upper Tax Tribunal in the case of HMRC v Colquhoun).

A commutation is within the scope (see EIM13000).

»Ê¹ÚÌåÓýapp section includes payments and benefits made in many circumstances, see EIM13020 for details.

See EIM13030 for details of benefits chargeable under section 401 ITEPA 2003.

»Ê¹ÚÌåÓýapp most common section 401 ITEPA 2003 payments and benefits are set out in the table at EIM13005.

With effect from 6 April 2018, an element of all payments made on termination of an office, or employment are chargeable as general earnings rather than under section 401 ITEPA 2003 (see EIM13874).