SE13530 - Termination payments and benefits: Section 148 ICTA 1988: £30,000 exemption: payments and benefits to be aggregated

Paragraph 7 Schedule 11 ICTA 1988

Before the £30,000 exemption can be given, it is necessary to add together all the payments and benefits within Section 148 ICTA 1988 that are made to, or in respect of, the same person in connection with:

• the same office or employment

and

• different offices or employments with the same employer

and

• different offices or employments with associated employers (see SE13540).

The exemption is then applied to the total. This ensures that only one £30,000 exemption is given for that total.

For example, a director is dismissed from two separate employments with associated employers, receiving £25,000 in each case within Section 148 ICTA 1988. The aggregated total received is £50,000 and only one £30,000 exemption is available against that total.

Having found out what the £30,000 exemption can be given against, it is necessary to divide the receipts into:

• receipts before 6 April 1998 and
• receipts on or after 6 April 1998

See SE13110 to find the year a payment or benefit is 'received'.

This has to be done because different rules for applying the exemption exist in each case:

• for payments and benefits received before 6 April 1998, apply the rules in SE13510
• for payments and benefits received on or after 6 April 1998, apply the rules in SE13520
• for payments and benefits overlapping 6 April 1998, see the example in example SE13960