EIM15021 - Employer-financed retirement benefits schemes: definition of "relevant benefits"

Section 393B ITEPA 2003

“Relevant benefits” are defined as meaning any lump sum, gratuity or other benefit provided

• on retirement (see EIM15042) or on death (see example EIM15310) or
• in anticipation of retirement (see EIM15149), or
• after retirement or death in connection with past service (seeEIM15149), or
• on or in anticipation of or in connection with any change in the nature of the employee's service (see EIM15149) or
• by virtue of a pension sharing order or provision

This includes a non-cash benefit. There is an example of this point at EIM15205.

However, it does not include any of the following:

• pension income charged to tax under Part 9 ITEPA 2003 (see EIM74000)
• benefits chargeable under Schedule 34 FA 2004 (see the Registered Pension Scheme Manual (RPSM) pages RPSM13102020 onwards)
• “excluded benefits”.

The following are “excluded benefits”

• benefits in respect of ill-health or disablement of an employee during service
• benefits in respect of death by accident of an employee during service (see exampleEIM15315)
• benefits under a “relevant life policy”. Guidance on the meaning of this is available in the Insurance Policyholder Taxation Manual (IPTM)
• benefits excluded by regulation (see below).

The regulations providing for benefits to be excluded benefits are:

1. The Armed Forces and Reserve Forces (Compensation Schemes) (Excluded Benefits for Tax Purposes) Regulations 2006 S.I. 2006 No.210 excludes all benefits paid from the Armed Forces Compensation Scheme from 6 April 2006 onwards.
2. The Employer-Financed Retirement Benefits (Excluded Benefits for Tax Purposes) Regulations 2006 S.I. 2006 No.210 excludes lump sum death benefits paid on the non-accidental death of an employee during service where those benefits are provided under scheme rules which were in place before 6 April 2006.
3. The Employer-Financed Retirement Benefits Schemes (Excluded Benefits for Tax Purposes) Regulations 2007 S.I. 2007 No.3537 exclude a number of benefits which were not chargeable to tax when provided by the employer where provision continues after the employment has ceased. The exclusion has retrospective effect from 6 April 2006 and applies to the following benefits:

• Living accommodation and related benefits (see EIM15022 re accommodation, EIM15023 re accommodation related benefits and EIM15024 benefits for employees family)
• Non-cash benefits received before 6 April 1998 (seeEIM15025)
• Welfare counselling (see EIM15026)
• Recreational benefits (see EIM15027)
• Annual parties and similar functions (see EIM15028)
• Writing of wills etc (see EIM15029)
• Equipment for disabled employees (see EIM15030)