SE13660 - Termination payments and benefits: Section 148 ICTA 1988: exemptions: lump sums from superannuation schemes

Paragraph 4 Schedule 11 ICTA 1988 (Section 188(1)(c) & (d) & (2) ICTA 1988 for payments and benefits received before 6 April 1998) and Section 189 ICTA 1988

Lump sum retirement benefits exempt from tax under Section 148 ICTA 1988 are:

payments (and commutation of pension) made out of a statutory retirement benefits scheme. This means a scheme for which the particulars are set out in Statute or Regulations, or which has been approved by a Minister or Government Department as such a scheme. Examples are the Principal Civil Service Pension Scheme and Local Government pension schemes.
payments (and commutations of pensions) made out of a pension fund or scheme approved by the IR SPSS (Nottingham)
payments made out of a fund or scheme within Section 221(1) & (2) of ICTA 1970. However, payments for compensation for loss of office, or for the loss or reduction of earnings are not exempt unless

the compensation can properly be regarded as a benefit earned by past service, that is, where it is really part of the individual's retirement benefits

Note that:

a lump sum from an approved retirement benefits scheme is exempt from Schedule E generally (Section 189 ICTA 1988)
if you are in doubt about the status of a particular scheme, IR SPSS (Nottingham) can advise.
a lump sum paid out of an unapproved retirement benefit scheme should be considered under the rules in SE15000 and subsequent instructions, in particular SE15100
this instruction applies only to lump sums. Pensions remain taxable under Schedule E (see SE74001)