Section 323 ITEPA 2003 provides a tax exemption for long service
testimonial awards that satisfy certain conditions (see
EIM01500).
One of the conditions is that the taxable value of the award
must not exceed £50 for each year of service with the same
employer (£20 per year of service if the award was made on or
before 12 June 2003). If an employee receives awards on two or more
occasions (for example, after 20 years and then after 30 years
service) the monetary limit is calculated
separately on each occasion. The exempt amount
available at the 30 year point is not affected by any exemption
that may have been allowed in respect of the 20 year award.
Note, though, that no exemption is due if the employee has
received another long service award, for service with the same
employer, within the previous 10 years. So if an employee receives
awards after 25 years and then again after 30 years, no exemption
is due for the 30 year award because the 10 year rule is not
satisfied.
For the purpose of the 10 year rule it does not matter if the
earlier award did or did not qualify for exemption under Section
323. All earlier awards in respect of service with the same
employer count for the purpose of the 10 year test, whether taxed
or not.
See example
EIM01510.
