EIM15425 - Non-approved and employer-financed retirement benefits schemes: example: overseas schemes: ESC A10: full exemption

Extra-Statutory Concession A10

For guidance on ESCA10 see EIM15062 and subsequent guidance.

An employee retired from employment with a foreign company after 20 years' service.

The service in the first 15 years counts as “foreign service” (see the definition at EIM13690) whereas that of the last 5 does not.

On retirement, the scheme pays the employee a lump sum of £100,000.

ESC A10 applies. Not less than 75% of service in the employment is foreign service (15/20 = 75%) so test a. in EIM15063 is met. Consequently the lump sum is fully exempt from income tax.