(This archived guidance relates to HMRC discretionary
practice before the 6th April 2006. For current guidance on
Registered Pension Schemes see the Registered Pension Schemes
Manual)
An employer may make an ex-gratia payment to an employee on
severance of an employment due to redundancy, or loss of office, or
because of death or disability due to an accident; but these
payments are not "relevant benefits" (see
PSI1.1.7-10). They will be charged to
tax under Schedule E on the recipient for the year of assessment in
which the payment is made.
