SE13610 - Termination payments and benefits: Section 148 ICTA 1988: exemptions: payments on account of injury or disability: general

Paragraph 3(b) Schedule 11 ICTA 1988 (Section 188(1)(a) ICTA 1988 for payments or benefits received before 6 April 1998)

A termination (or change) payment is exempt from tax under Section 148 ICTA 1988 if it is paid on account of:

• an injury to the holder of an office or employment or
• the disability of such a person ( SE13620).

“Injury” is construed as physical injury. It does not include injury to feelings.

This means that the injury or disability causes the termination (or change of function).