EIM30530 - Deductions: directors’ and officers’ liabilities: relief for ex- employees

Section 555 ITEPA 2003

Section 555 ITEPA 2003 provides for deductions from total income for ex- employees' uninsured liabilities:


  • that they themselves have to bear and
  • that are not deductible under Section 346 ITEPA 2003 (see EIM30501 onwards) but would be so deductible if the ex-employee had:
  • continued to hold the office or employment in respect of which the liability arose and
  • met the liability out of the earnings of that office or employment.

The provisions also effectively cancel out charges under:


  • Part 6 Chapter 2 ITEPA 2003 (benefits from non-approved or employer-financed pension schemes) and
  • Part 6 Chapter 3 (payments, including `valuable consideration' provided in connection with the termination of an employment)

where the charge would arise as a result of someone other than the employee


  • bearing the employee's qualifying liability (see EIM30511) or
  • providing him or her with a cover under a qualifying contract of insurance (see EIM30513).