EIM15315 - Employer-financed retirement benefits scheme: example: payment on death by accident

Section 393B ITEPA 2003

An employee died on 30 April 2006 after falling from the roof at home at the weekend. The employer decides to make an ex-gratia payment of £25,000 to the spouse and does so on 1 June 2006. Since the payment is made after 5 April 2006, you consider the employer-financed retirement benefits scheme rules (see EIM15010).

The payment is not chargeable because only “relevant benefits” from such a scheme are chargeable under Section 394 ITEPA 2003 (see EIM15010 at the second bullet point) and such a payment is not within that definition for employer-financed retirement benefits scheme purposes (see EIM15021).

The fact that an accident happens whilst the employee is off duty at home does not matter: the accident is “during service” if it happens at any time while she or he is an employee.

For payments on death otherwise than by accident, see example EIM15310.