A taxpayer holds an employment with company A from 1 January
2000 to 31 December 2004. From 1 January 2005 to 31 December 2009
the same person holds an employment with company B, which is in the
same group of companies.
On termination from company B, an ex-gratia payment within
Section 401 ITEPA 2003 is made which reflects the employee's whole
service with both companies. The total period of service is then
treated as 1 January 2000 to 31 December 2009.
By contrast, if the termination payment from company B was
related only to compensation for the loss of
that employment, the total period of service for
the purposes of
EIM13690 is then 1 January 2005 to 31
December 2009. This would be the case, for example, where the
employee was dismissed wrongfully (see
EIM12970) and the termination payment
reflected only compensation for the loss of the employment with
company B (see
EIM13070).
