SE13030 - Termination payments and benefits: scope of Section 148 ICTA 1988: benefits

Section 148 ICTA 1988(3) ICTA 1988 [as enacted before FA 1998] & Section 148 ICTA 1988(1)-(3) ICTA 1988

What “benefits” are within Section 148 ICTA 1988?

• For a non-cash provision used or enjoyed (see SE13110) on or after 6 April 1998, there is a definition of “benefit” in Section 148(2) ICTA 1988:

• “… a benefit includes anything which, if received for performance of the duties of the employment – (a) would be an emolument of the employment, or (b) would be chargeable to tax as an emolument of the employment, or which would be such an emolument, or so chargeable, apart from any exemption.”
• The above definition is drawn in the widest possible terms. Note that it “includes” (a) and (b) above, and therefore goes wider than either. So something provided for an employee which would not be taxed as an emolument of the employment or as a benefit under Part V ICTA 1988 ( SE20001 & SE11301) can still be a “benefit”, using the ordinary meaning of that word, for Section 148 ICTA 1988 purposes. In general, report to Personal Tax (Technical), Solihull any case where it is asserted that a non- cash provision is not a “benefit”
• The right to receive a benefit is not itself a "benefit". For example, if as part of a termination package an employee is given the right to use a car after termination, that right is not a "benefit". The actual use of the car is taxed (see SE13270)

• For a non-cash provision used or enjoyed before 6 April 1998, Section 148 ICTA 1988(3) ICTA 1988 provided that:

• “… any valuable consideration other than money shall be treated as a payment of money …”
• this means that any provision capable of having a value placed on it is within the scope. That includes all provisions that would now be labelled “benefits”, such as use of an asset.

See SE13250 for the treatment of non-cash provisions.